The University of Buckingham has withdrawn its support for the Leicester Dental Teaching Academy (LDTA) at the Phoenix arts centre.
The university had accredited the £176,000 five-year course to train dentists, which had been due to commence in September 2012.
The academy's opening date has been shelved after discussions with the General Dental Council, and now the university has said the delays and large costs involved have persuaded it to drop the project.
A statement issued jointly by the university and the LDTA said both had 'pursued this venture with enthusiasm'.
However, it said: 'As the university is unable to commit to a start date, this has made it impossible for the LDTA to complete contracts for the provision and construction of facilities as required in the joint venture.
'Both parties reached an amicable agreement to end the joint venture in January.
'The University of Buckingham will support, as far as it is able, the efforts by the LDTA to attract an alternative venture partner.'
How many students had signed up for the course before it was put on hold in September 2012 remains unclear.
Had the course begun on schedule, students would have been taught in a Phoenix cinema auditorium when it was not in use and trained on expensive model heads.
The academy would have offered free dental treatment to patients who were happy to have its students work on them.
LDTA's plans included building a £6 million dental school and clinic next to the Phoenix.
No planning permission has been sought for the scheme.