The primary on the island of Bressay, which lies a seven-minute ferry crossing from Shetland's capital, has an operating capacity of 75 pupils but the current roll is only four, with many parents putting in placing requests for their children to be educated at the bigger school in Lerwick.
It costs almost £40,000 a year to educate each child on Bressay and the roll is projected to fall further to three.
There are no children enrolled in the nursery class. There are four on the island who are eligible, but they attend nurseries on the Shetland mainland.
A report going to councillors next month from education officials proposes the island's primary pupils go to Bell's Brae Primary in Lerwick, which has a roll of 295 pupils, well short of its capacity of 434. It would take the estimated cost per pupil down to £5481.
If councillors agree on the plan and it is not called in by the education minister, Bressay's pupils will start in their new school after the summer holidays.
Local councillor Allan Wishart said that for many years some pupils have been travelling across to Lerwick to the bigger school, but added: "That process has accelerated over the years. It is difficult to maintain the educational value when there are only a handful of pupils left ranging from age five to 12."
Mr Wishart added: "There are one or two parents who live and work on Bressay who want the school kept open for their children. I have a lot of sympathy for them, but it is not an easy situation."
Many islanders take the short ferry trip across Bressay Sound as they commute to Lerwick for work. This has been reflected in the number of placing requests the council has received from parents wanting to take their children away from the island primary and send them to school in Lerwick.
Since session 2009/10 there have been 19 requests to move pupils from Bressay and none in the opposite direction.
Closing the school would save the council almost £75,000 a year. But Shetland's children's services department believe the Bressay children will gain considerable educational benefit from going to a larger school including new learning opportunities, sport and social interaction with others their own age.