Aberystwyth University is planning to close its overseas campus on the island of Mauritius just two years after it opened.
The governing body of the institution has decided it will "not enrol further intakes of students" at the branch campus from March 2018.
It was built to accommodate 2,000 students, but just 106 enrolled in its second year.
Aberystwyth University did not wish to comment.
The move has been welcomed by Mid and West Wales AM Simon Thomas, who is a former student.
Cen Llwyd, of Ffrindiau Pantycelyn, a campaign group set up to protect Welsh language halls of residence at Aberystwyth University, called the Mauritius venture "a waste of money".
In May 2016, a former vice-chancellor for the university described the venture as "madness" after just 40 students enrolled during its first academic year.
They read: "Discussions with the academic departments which deliver programmes at the branch campus had indicated that there was no appetite for an intake of new students in March 2018."
They continued: "The university will not enrol further intakes of students at the branch campus."
The institution made a loss of nearly £200,000 from the venture during its first year, according to its latest figures. It has not revealed its financial accounts for the 2016/2017 year.
In October it was announced that eleven academic jobs were to be lost at Aberystwyth University in a bid to make £6m savings in the current financial year.
Mr Thomas said he had been critical of the decision to open the Mauritius campus at a time when the university "faced other problems".
He said he wanted it to return to its "core values" as a university in mid Wales and not focus on "a vision I did not share".
Mr Llwyd reiterated the view, questioning why money was spent on the venture in 2015 at a time when the university's Welsh language halls of residence Pantycelyn closed, in need of a multi-million pound refurbishment.