Sandown Bay Academy has been rated "inadequate" by Ofsted because of "ineffective leadership at all levels".
Inspectors said the school's sponsor, Academies Enterprise Trust (AET), also failed to deal effectively with a "debilitating cyber-attack".
Isle of Wight councillors voted in May to ask the government to oust AET "off the island altogether".
In April, the head teacher resigned and the trust replaced the board of governors.
Ofsted inspectors, who visited the following month, said pupils had been "let down in the quality of education they receive for too long".
The report said grades had fallen since 2015 and "too many pupils are persistently absent".
It said AET had not supported the school following the cyber-attack which resulted in a "widespread loss of important documents", including pupil progress reports, teaching plans and exam work.
Ofsted praised the behaviour of pupils and a unit for pupils with autism.
On 25 May, the day after inspectors left, AET announced plans to close the Sandown site as part of a previously-declared "merger" with Ryde Academy, 6 miles (10km) away.
Explaining its proposal, AET said income at Sandown Bay had dropped by £5m in five years.
A six-week consultation by AET on the merger plan runs until 6 July, while Isle of Wight Council is holding a separate consultation on rival plans to retain secondary education in Sandown.
In a statement, the trust said: "We acknowledge that AET has not succeeded in driving forward the educational improvements at Sandown Bay that we would all wish to see."
It said it had replaced the governors and head teacher with an "experienced" management board and "new leadership team".
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