The HSE has said it is disappointed that the Daughters of Wisdom said they are no longer in a position to remain as a provider of services for people with a disability.
The Health Service Executive said it was informed of the decision yesterday afternoon.
It said it had been working with the Daughters of Wisdom over recent months to try and find solutions to the difficulties presented to the charity.
The Provincial Leader of the Daughters of Wisdom Sister Jean Quinn said she is disappointed the charity is no longer in a position to remain on as a provider of services at Cregg House.
She said the decision taken was not by choice but because the charity could not afford to continue providing the service.
Sr Quinn said the Daughters of Wisdom had been in intensive negotiations with the HSE for the last number of months, to no avail.
The HSE said: "Unfortunately, the Daughters of Wisdom have now decided that they are no longer in a position to continue as the service provider."
In a statement, the HSE said this period of transition and change is unsettling for people who use the services, their families and staff.
However, the HSE said it wants to reassure clients and their families that they will continue to receive the services that they require.
Cregg House caters for 214 people with intellectual disabilities, including 188 residents and 26 people who avail of day services.
Sr Jean Quinn said it was not the Daughters of Wisdom choice to leave and that is why they stayed in the negotiations with the HSE for so long.
She added that the decision had been taken though and it was final.
The Daughters of Wisdom have been involved in running Cregg House for 57 years.
