A group of parents had been planning to set up a new year 7 to 12 Catholic school after the archdiocese declared earlier this year it would close the secondary part of Mount Carmel.

The parents set themselves up as a board and signed a 20-year lease on the old Mount Carmel secondary school buildings in July with the Yass Parish priest Father Mick Burke.

In a statement, the archdiocese said the parents' announcement in July that they had leased the old buildings was "premature and unauthorised".

On Wednesday, Archbishop Christopher Prowse declared the lease invalid in a meeting with Father Burke and Paul De Szell, chairman of Mt Carmel College Ltd.

The lease had proposed to share the campus with the current and continuing K-6 Mt Carmel School, which is now run by the Catholic Education Office.

"I have decided, after extensive consultation and giving the matter serious reflection, that the proposed campus-sharing arrangement is not viable," the archbishop said.

He said issues around the school's proposed governance were also behind his decision to refuse the lease.

Catholic Education Office resource management and strategy head John Barker told The Canberra Times in March that just 61 students were enrolled in years 7 to 10 at the school this year, down from nearly 150 in 2004.

Archbishop Prowse said while he knew parents in Yass would be disappointed, he wanted to "remind families that year 7 to 12 Yass students have significant educational opportunities at our Canberra Catholic schools".

Any new school declaring itself to be Catholic would need his approval.

The Catholic Education Office has said Mount Carmel students would get priority placement in Catholic schools in Canberra's north in 2015 and regular buses would ferry students to and from school.