The school has around 70 pupils who will all have to find new schools.
Explaining the decision when the closure was announced, schools minister Lord Nash said that "none of the school's teachers were delivering good lessons and all were still consistently inadequate or required improvement".
A man arrested on suspicion of murdering a grandmother as she house-sat for friends in a small village has been released on bail, police said.
The 22-year-old man, who was detained on Tuesday in connection with the killing of Valerie Graves, has been released on conditional bail until February 17, Sussex Police said.
Ms Graves, 55, was murdered in a bedroom at a waterside property in Bosham, West Sussex, on December 30 as she house-sat with her mother, sister and her sister's partner while the owners holidayed abroad over Christmas.
A post-mortem examination found she suffered significant head and facial injuries.
Police investigating the murder of Valerie Graves, who was found dead in a West Sussex house, have not made any arrests in the case.
At a press conference today, Sussex Police said the 55-year-old woman "went to bed about 10pm in the evening on Sunday 29th [December] and she was found at 10am the following morning. She was found in the bedroom in the rear of the house."
The police force also revealed they are following "a large number of inquiries" and a "significant number of officers" are looking for items which could be connected to her murder.
Andrew Snowdon, the founder of the failing free school in West Sussex, blamed Ofsted and Education Secretary Michael Gove's department for the problems at Discovery New School.
He told Channel 4 News: "The real failing is one of an out-of-control Ofsted and a Department for Education that hasn't always sung from a single song sheet or provided adequate support at the right moments.
"We were trying to do something very different here and always looking for short-term measures and quick results doesn't always produce what you want."