Metrochange House, the Bradford training centre subject to a four-month investigation by the Qualifications and Curriculum Authority, is to shut down.
More than 80 students will have to be found new places as a result of the closure of the council-run centre. They are studying for NVQs in business and administration.
After the QCA investigation, the trainers based at Metrochange House - Business Administration and Information Technology - were found to have falsely awarded NVQs. Seventy-three students have subsequently had their certificates invalidated.
The work of a further 230 NVQ students at Bradford City Council's other schemes are now being assessed by the QCA.
A spokesman for the council said: "There were problems that were too deep to resolve while Metrochange House was still open, so it was felt the best way to deal with the scheme was to close it. Staff were told over a week ago. They will be redeployed within the council."
Bradford's training and enterprise council had immediately written to all 84 Metrochange students, said Mike Lowe, its operations director. The TEC gave them a choice of three training centres in the area at which to continue their training.
He said: "We lost three training suppliers last year for various reasons, and have experience of transferring students very quickly. There shouldn't be any appreciable delay for the students in gaining their NVQ qualifications. " He envisaged that the whole process should take no more than five weeks, to minimise disruption.
Kris Hopkins, a local Conservative councillor, was concerned that closing the scheme would not address underlying problems. "At a council sub-committee meeting, they said they had instituted QCA systems and procedures, but these should have been in place 14 months ago. I don't know how the problems can have been resolved, when the QCA report hasn't been issued yet."
When the council invalidated certificates, it failed to notify students for two months, Mr Hopkins added.
"No one has looked at the consequences of this. People have graduated and got employment and then found their certificates are invalid," said Mr Hopkins. "Will they be thrown out of a job, or will employers release them to undertake further training? Will employers or trainees be seeking compensation?"