The University of Lincoln said cladding was being removed from a "small proportion" of one of its buildings on the Cygnet Wharf development.
It said the cladding would be replaced with a suitable material, prior to it being occupied.
A spokesperson said student safety was a priority.
In a statement, the university said it had launched a full review of fire safety across all its buildings.
"This includes construction materials, provision of fire safety measures and evacuation procedures in all our campus buildings and student residential accommodation to ensure they are of the highest standard," it said.
The university said it has also written to private landlords requiring them to provide assurances to students about the safety of their buildings.
Tests are being carried out on 600 high rises across England and all samples tested so far have failed, amounting to 60 high-rise buildings in 25 local authorities, the government said.
The Grenfell Tower fire in north Kensington on 14 June started in a fridge-freezer, and outside cladding and insulation failed safety tests, police said.
Earlier, the prime minister said cladding from 120 high-rise buildings in 37 local authority areas in England has now failed fire safety tests,
Theresa May told the Commons it was a 100% failure rate of all of the samples submitted so far since the Grenfell Tower fire.
Questions were raised about the cladding used on Grenfell in the immediate aftermath of the disaster and a nationwide operation has taken place to identify and test buildings with similar cladding.
Cladding on new student accommodation in Lincoln is being removed because it fails to meet newly issued government guidelines.