CHEPSTOW School will make 11 members of staff redundant.
The school is predicted to have a deficit of £385,000 by the end of 2015 and the redundancies are part of the school's recovery plan.
Claire Price, head teacher at Chepstow School, said: "We are a successful school with good, and improving, results.
"Cuts in funding are affecting all schools in Wales. It is a difficult time.
"Chepstow School has taken some hard staffing decisions that will enable us to make sure that the young people in our school continue to make excellent progress.
"Our focus remains delivering the best possible education for our students whilst ensuring our financial security into the future."
Sarah McGuinness, chief officer for children and young people at Monmouthshire County Council (MCC), said: "Chepstow School is currently addressing a budget deficit position.
"The school is following due process and we can confirm that approximately 11 redundancies are forecast.
"However, the school and the local authority are working together to try to minimise the effects, and in line with protection of employment policy, all possible means will be sought before making compulsory redundancies. As part of the process, the school is ensuring that all necessary measures are taken to support staff."
Leader of the Labour Group at MCC, Councillor Dimitri Batrouni, has called for an urgent statement and update from the cabinet member for education about the financial situation at Chepstow School. He has expressed concern over Chepstow School's finances and believes full council should be given an update on the situation.
Councillor Liz Hacket Pain said: "I would like to reassure parents the matter is being addressed in the correct manner.
"We are confident Chepstow School will have its finances back on track."

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