The decision to seek filters that screen microbes has raised the cost and delayed installation.
School Performance Scores for about 65 percent of schools are down since 2014.
After it closes next spring, just three traditional schools will remain in the city.
A board committee voted to close the school and hand the building over to Dryades YMCA, which operates a nearby charter school.
Dryades would move younger students at James M. Singleton Charter School to the site.
Schools run by the Orleans Parish School Board and the Recovery School District received a C this year.
This is the second time in two years the school has been cited for enrollment violations.
If the filters are installed properly, the tests should not detect any lead. School leaders decided not to test the water before installing filters.
School officials planned to test water, but they changed course after the water board raised questions.
The children can stay, but the state won’t pay for their education this year.