The Scottish Government ordered an immediate inspection of The Hamilton School in Aberdeen earlier this month after complaints from parents and staff about the nursery prompted a police investigation.
Following the inspection, the Government has ordered the school to be removed from the Register of Independent Schools which means that as of tomorrow it can no longer operate as a school.
The school said it is "stunned" by the decision and is considering an appeal.
Last week, the Care Inspectorate served an improvement notice on The Hamilton School Nursery, requiring urgent changes around life-saving medication, nutrition and staffing.
The Care Inspectorate said it has "serious concerns" about the quality of care offered to children in the nursery, which is covered by separate legislation.
It has applied to Aberdeen Sheriff Court seeking suspension of the nursery's registration and said a hearing has been fixed for Wednesday.
During their visit to the school, HM Inspectors had to intervene in two lessons where they saw serious health and safety risks and referred three child protection cases to Police Scotland.
They concluded that The Hamilton School is failing in its duty of care to its children and staff.
Earlier this month, two female members of staff, aged 25 and 65, were reported to the procurator fiscal following police investigations.
Minister for Learning Alasdair Allan said: "The safety, wellbeing and education of children is our absolute priority. There is clear evidence from the HM Inspectors' report that there have been serious failings in the school. They have said it is simply not safe for children to go there and so we have had no alternative but to order the school closed immediately.
"HM Inspectors have been at the school today to ensure the safety of the children and remain available to answer questions from parents.
"This is a difficult day for the parents and, most importantly, for the pupils of The Hamilton School. The Scottish Government, Aberdeen Council, the Care Inspectorate and HM Inspectors are working closely together to provide the information and support parents need. We will do everything we can to minimise disruption and distress."
He said Aberdeen City Council is confident it can accommodate all the school children. It has provided a telephone advice line on 01224 814828.
A meeting has been organised for parents at Harlaw Academy at 10.30am tomorrow.
Inspectors have been at the school since this morning to ensure the safety of the children.
The legislation covering nurseries is separate from that relating to school inspections.
The Care Inspectorate has been at the nursery to assess whether it can still provide a safe environment and to ensure the health, wellbeing and protection of children attending.
The Government said this is being taken forward "as a matter of urgency" today.
A Care Inspectorate spokesman said: "We reported allegations to the police last month and have extremely serious concerns about the quality of care offered to young children in the nursery. Following a joint inspection with Education Scotland, we served an improvement notice, requiring urgent changes around life-saving medication, nutrition and staffing.
"We regulate The Hamilton School nursery, but not the school itself.
"Following the ministerial decision to close the school, our inspectors visited the nursery this morning and remain extremely concerned for the health, safety and welfare of children."
The Hamilton School caters for children from birth to 12 years of age.
A Hamilton School spokesman said: "A lengthy letter from Education Scotland has been submitted to the school and we are considering this with our legal advisers.
"An appeal is under active consideration. We are stunned by this decision and don't believe it's in the best interests of the children, their parents or the 85 staff employed here.
"In nearly 40 years of business we have had thousands of satisfied parents and children and the majority of those whom we have spoken to over the past few weeks have remained happy with the school and have been very supportive."
Police Scotland said that their inquiries are continuing.