Sydney University will not go ahead with a planned merger of the Sydney College of the Arts with the University of New South Wales' School of Art and Design.

The merger was set to take place early next year, but Sydney University now says it is unclear whether a centre of excellence is achievable.

University vice-chancellor Dr Michael Spence said that the two institutions had different visions, and that the new facilities would not be able to preserve the Sydney College of the Arts' (SCA) traditions.

The NSW Opposition has welcomed the decision.

“They [the students] were also fearing that art educators would move to other Australian capital cities and move interstate or overseas,” spokesperson Walt Secord told reporters.

“So there's a tradition in Sydney and they wanted to ensure the art scene in Sydney thrived.

“I'm glad that the university has listened to the students, teachers and artists.”

Dr Spence issued a statement.

“We have become increasingly concerned about the adequacy of the facilities available to realise our vision of a centre of excellence,” he said.

“Regretfully, I am not sufficiently confident these differences can be reconciled in time for a 2017 start.”

The vice-chancellor said the SCA would still be merged into the Faculty of Arts and Social Sciences at the university.

“At this time our priority must be to secure and to develop the strengths of the SCA,” he said in the statement.