NSCAD University occupies a rabbit warren of classrooms and studios inside a block of Victorian buildings between Granville and Hollis Streets.
The school has been located there since the 1970s, but last week, the board of governors decided it is time to leave.
"This was never designed and built as an art and design school and university. We inhabit these historic buildings, and as charming as they are, they don't necessarily meet the standards we require," NSCAD president Dianne Taylor-Gearing said.
The cost of renovating the buildings, which house the university's Fountain Campus, is $25 million.
The university received a $3-million dollar donation last July and began discussing how to spend it.
It concluded moving made the most sense.
No decision has been made on where the students will go or what will be done with the buildings.
The university says it will come up with a plan with all those details by the end of 2019.
"A lot of students really understand why this decision was made because when they inhabit these hallways, they see the walls falling apart, they see the constant upkeep that is required," Gabriel Soligo is the student union president said.
"They see their studios suffer because of that as well."
Canada's oldest independent arts university has struggled financially in recent years, and currently faces a $13-million debt.
The university hopes to move to an integrated campus by the end of 2019.
Its other campuses include the Academy Building on Brunswick Street and a 6,500-square-metre building on the city's waterfront.
The school said last year it was making progress on reducing its deficit and debt.
It flirted with the idea of merging with another university in the city to help ease costs, but concluded an affiliation would not lead to savings and could actually cost more.