The project for children with cerebral palsy is a joint initiative between the city, the Scottish Office and the specialist Craighalbert Centre in Cumbernauld, a pet project of Michael Forsyth, the Scottish Secretary.
Additional Government funding to allow a senior member of the Craighalbert staff to spend some time each week at the Dundee unit will end in November.
The unit has three full-time staff: a teacher, nursery nurse and training and care assistant. The original target was six pupils. A report says the staffing level is "substantially in excess of that provided for pupils with special educational needs within other Dundee provision". The constraints of longer-term funding and the loss of the Craighalbert input are driving the review, councillors will be told.
The unit is likely to have four pupils next session although the post of nursery teacher is likely to be withdrawn. Staffing will still be above that in other special needs provision.
A final evaluation of the unit, the only outreach project on the Craighalbert model, will be produced in December.
Barbara Hughes, Dundee's education services manager, said that after a "baptism of fire" the project was working well. "The first year was very hard and we had anxieties and stresses but the second year is very successful."
Pupils now spend half their time in mainstream classes.