Isle of Portland Aldridge Community Academy (IPACA) is an independent trust, co-sponsored by the Aldridge Foundation and Dorset County Council.
It had been due to join multi-academy trust Aldridge Education from January.
However, Aldridge said this would no longer go ahead and it would not continue to sponsor the school.
London-based Aldridge Education previously said IPACA governors had voted to join the trust.
However, following discussions with the regional schools commissioner it said the move was "no longer in the best interests of the children and IPACA".
"We will therefore stand aside as the academy's lead sponsor to enable a decision to be reached on how the school is best supported going forward."
Joss Hayes, IPACA's principal, said a multi-academy trust with more resources to deploy locally would better support staff "to achieve improvement quickly and ensure a sustainable and stable future for the academy".
She said the Aldridge Foundation had committed to continue supporting the school "as part of an orderly transition process".
Chairman John Tizard and vice-chairman Matt Longshaw of IPACA board of governors resigned last month, shortly before the BBC also learned the school had been issued with a government warning over its finances.
More than 1,000 parents signed an online petition against the plans to join Aldridge Education, and about 40 had protested at the site.
Commenting on the IPACA Supporters' Group page on Facebook, Matt Longshaw said he hoped the latest development would lead to "more local accountability and control".
Debbie Smith added it was "great news for the future of our children".
IPACA has 1,029 students aged from four to 19.
A school that has recently seen two of its board members resign over changes to the way it is run will not join a multi-academy trust as planned.