Little Pioneers Nursery, based in a listed church building on 21 Cheam Road, has reported occasional instances of water ingress since its opening.
The nursery said it has taken steps to address past issues while seeking assurances from the landlord that more extensive repairs would be carried out.
In recent days, the problems have got worse, making urgent maintenance necessary.
The nursery made the immediate decision to close.
Families have been offered temporary transfers to the nursery’s Tadworth site while the nursery continues to engage the landlord and explore alternative locations in the area.
A spokesperson for Little Pioneers said: “Our Sutton nursery is part of a historical church building which has listed status.
“In the time we have been at the site, there have been some instances of leaks and water ingress into the building.
“When these have occurred, we have taken the necessary steps to address them, while also seeking assurances from the Landlord that more extensive works would be undertaken to prevent further issues.
“In recent days, it became clear to us that the impact of these issues had worsened, and that extensive maintenance was urgently required.
“As the safety and security of the children in our care is always our highest priority, we therefore took the immediate decision to close the nursery.
“While we continue to engage the Landlord in the hope of finding a solution, we are also looking to identify alternative sites in the area that could host the nursery.
“In the meantime, we have offered temporary transfers to our Tadworth nursery for our families during the closure.
“We recognise that closure of the nursery will be unsettling for our families, and we are doing everything we can to support them at this time and to find a long-term solution.”

