The State of Texas revoked the charter for Prime Prep Academy, the school co-founded by NFL Hall of Famer Deion Sanders in 2012, earlier this week.
About 260 students were attending classes at the two campuses.
Teachers handed out letters to students at the end of the day explaining the school was closing and how to transfer to another school.
"It's like a family at this school," said student Mark Byther. "Everything has been taken. I guess every good thing comes to an end."
Prime Prep only has $60,000 in its bank accounts, but more than $700,000 in debt. The Texas Education Agency said it's unsure how the debts will be paid off.
Prime Prep's worsening financial state became clearer this week, when ex-superintendent Ron Price revealed hundreds of thousands of dollars worth of bills hadn't been paid when he took over one year ago.
The school also reportedly didn't have enough money left to make its January payroll obligations.
"I had no idea that we were in that much financial struggle," said Virginia Marshall, a parent of two children who attended Prime Prep.
Sanders, in Arizona for the Super Bowl, tweeted thanks to the TEA for working with Prime Prep during its numerous issues.
Dallas ISD officials said they would be prepared to enroll any former Prime Prep students.
"I'd prefer to graduate from [Prime Prep], but I can't do nothing about that, so I'll just graduate from wherever I go," said Alize Ward, a senior who was attending Prime Prep.
"This is like a family at this school, and it's all been turned away from us," said Mark Byther, a sophomore who attended Prime Prep. "Everything has been taken. I guess every good thing always comes to an end."