The owner of the Riverstones centre, who did not wish to be named, spoke of her disappointment over the closure.
The learning centre is licensed for 33 children and the Ministry of Education requires three qualified early childhood education teachers for it to remain open.
The owner, based in Auckland, said the centre had to close when one of her teachers resigned – leaving her with only two qualified teachers.
This follows a lengthy struggle to find a stand-in for her manager, who has just returned from maternity leave.
"I have asked for help from the Ministry of Education – they gave me no support, they told me to sell the centre."
The MOE's enablement and support sector deputy secretary Helen Hurst said it has offered support to the business where it can - including funding to expand the service and as a broker with other providers in the area.
But the owner said New Zealand's teacher shortage, the lack of accommodation in the town and the ongoing struggle to attract people to Lumsden had compounded.
"I tried until the last minute …. I am still trying to get people to come down and work for me. I am happy to pay their rent, I am happy to pay for their travel."
But the owner said even offering to cover accommodation and travel costs is not enough.
"The closest [accommodation] I can find for them is Winton and Gore and they don't want to drive, it becomes even harder. "
Families have already been hit hard in the past with the closure of the Lumsden Birthing Centre in 2018.
A protest march in the town's main street and a 4000-signature petition was not enough to stop the Southern District Health Board from downgrading the unit to a maternal and child hub.
It means expectant mothers must travel elsewhere as a baby can only be delivered at the centre during an emergency.
Parent Ashleigh Brewer said the community had been blindsided by the short notice of the centre's closure.
Her greatest concern is the impact it would have on jobs in the community.
"It's calving and lambing season and is one of the busiest seasons in the farming sector, now parents are going to have to drag their kids around work with them [if they are allowed] or quit working. Just another blow for farmers and a small community," she said.
Brewer said she would like to see a push on early childhood education for teaching and more incentive to move to a small place like Lumsden.
MP for Southland Joseph Mooney said his heart goes out to the centre and families as the closure is the last thing they want to do.
"It is a really tough situation, but the early learning centre had been forced into that position because they couldn't find a teacher. It is an example of the shortage we are experiencing across the region and the country".
He said the town needs more skilled workers from overseas and the Government needed to focus on ensuring all MIQ facilities are used to their full capacity.
But the owner said she is planning to renovate the building while it is closed and will continue to carry out interviews in the hopes of reopening the centre next year.
