The council-run Sprouts Nursery lost just under £94,000 in that time, accounts have shown.
Council officials said the financial position was "no longer sustainable".
Consultation with staff at the Rhosddu Road site will now take place, with the plan to shut the facility in mid-September.
"The decision to close was not taken lightly," said council leader, Mark Pritchard.
"Sprouts opened in 2015 following an identified need for out-of-hours nursery provision in Wrexham.  Unfortunately this need never fully materialised and we find ourselves in the position we do now."
The nursery can accommodate up to 40 children, opening 12 hours a day in the week, and also offered childcare places on a Saturday.
Details released under Freedom of Information requests show the nursery cost £155,000 to set-up when it was officially opened by the then communities minister, Lesley Griffiths.
The cash from the government was part of its £100m Vibrant and Viable Places programme for regeneration in town centres, coastal and deprived community areas.
However, the nursery lost £44,000 in 2015-16, and £49,700 in 2016-17.
Councillor for the Grosvenor ward, Marc Jones, said: "It's been clear for some time that the nursery was losing significant amounts of money - approximately £5,000 a month.
"Questions must now be asked of the initial business plan, which led to more than £150,000 of Welsh Government and Wrexham council funding to be spent on the venture."
A nursery given £245,000 by the Welsh Government and Wrexham council will shut in September, just two years after it opened.