The San Francisco Art Institute will not accept students for the fall semester after almost 150 years in operation, ending the legacy of a once-storied school that produced famous artists like Annie Leibovitz, Kehinde Wiley and Catherine Opie.

The institute announced Monday in a schoolwide letter that it plans to suspend classes after the spring semester. Graduating students will receive their degrees in May, but faculty and staff were told to prepare for mass layoffs. One senior official close to the decision-making process said the school was likely to close because of mounting debt.

“We are looking down the barrel of a gun,” Gordon Knox, the college president, told faculty during a town-hall meeting in late February. Like many art schools across the country, declining enrollment and financial hardships have plagued the institution for years. In 2017, S.F.A.I. spent millions on a second campus on the city’s waterfront. This year, the school abandoned another costly project to build new dormitories. The final straw for the faltering institution was when discussions to merge with a local university collapsed after the coronavirus sent the Bay Area into a lockdown. Pam Rorke Levy, the institute board’s chair, estimated the university’s total debt was around $19 million but likely to increase because the school is not earning revenue during the health crisis.