Aboriginal Affairs said in a letter last week to the First Nations University of Canada that it would no longer be leasing nearly 3,200 square metres of space at the schools' main campus.
The university says the decision means a five-per-cent drop in revenue, or more than $1 million a year.
FNUC has an annual budget of $20 million.
David Sharpe, FNUC's governor, says they suspected Aboriginal Affairs would not be renewing its lease, which expires at the end of next April.
Sharpe says the university is talking to potential tenants to help make up the shortfall. (CJME)