After 30 years in the sector, Albury-Wodonga Community College will stop providing childcare services entirely in 2020.
It comes almost a year after seven rural communities were left in the lurch when AWCC closed childcare centres in Mitta, Walwa, Kergunyah, Baranduda, Bellbridge, Henty and Walla with little notice.
Chief executive Rodney Wangman said the 2018 changes to childcare funding and lower attendance at the college's three remaining centres had seen the organisation lose more than $500,000 in six months.
On Thursday, Mr Wangman announced the organisation would close its remaining community childcare centres in Chiltern and Wodonga in December 2020.
He said the Kiewa service would end this December as Kiewa Valley Primary School had decided to end its rental agreement with AWCC.
Mr Wangman said he believes Kiewa has another provider lined up to take over the service.
Mr Wangman said about 18 staff will lose their jobs when the three sites close, but he hopes another provider will take over the services and retain staff.
"I'd like to acknowledge the hard work our staff has done and will continue to do through the transition," he said.
"I can't speak higher of the team.
"We leave the sector with a great deal of pride having over many years provided childcare services to hundred of families and thousands of children."
Mr Wangman said operating costs had increased dramatically since the transition to the Child Care Subsidy funding system in mid-2018.
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"For the Community College, that change of funding impacted us with losses we could not sustain," he said.
"I still question, having been involved in this area for 30 years, what it means for very small communities that should have access to equitable access to childcare - equal to that available in regional cities and metro areas.
"The sad part is that, in my view, the funding model does not support the operation of small rural-based locations."
Last year, the department of education said the closure of AWCC's seven childcare centres was an isolated case, with other providers similarly funded still operating.
Mr Wangman said the college would provide the existing facilities, at no cost, to anyone wishing to take up the provision of service.
The college and Indigo Council will undertake an express of interest process and form a selection panel to find the best provider to take over the Chiltern services.
Indigo Shire mayor Jenny O'Connor said it was disappointing news which had worried many parents, but council was "absolutely committed to making sure the centre remains open".
She said childcare, especially long-hour childcare, was an essential part of ensuring the town was viable into the future.
"Obviously those directly affected and the ones we're immediately concerned about but there are broader longer term implications," she said.
"It's really critical for the growth and development of Chiltern into future.
"A lot of people are looking for that 'village life' experience but work in bigger towns and long hour childcare is critical in that case.
"This service is really essential for the whole community of Chiltern, not just those using it."
Indigo Shire will be hosting drop-in sessions next Tuesday from 2pm at the kindergarten and from 3.30 at the childcare centre to meet with families and community members about the issue.
Cr O'Connor was confident a provider would be able to be found before the centre closes in December 2020, but said council would consider taking over providing the service, like Greater Hume did in Walla and Henty, if needed.
The Federal Education Minister and Department of Education have been contacted for comment on the situation.