The city's 25 educators operating under the Regional Family Day Care scheme were told yesterday morning that Wagga City Council would no longer provide licences for their services from the end of the financial year.

Educator Shannon Castle said she and other Family Day Care providers had been left in the lurch after being notified of the decision in the same email which was sent to families.

Ms Castle will have to move her services under a different day care scheme if she wishes to remain in Wagga, a move which she said was "not as simple as council has said it's going to be".

"Moving to a new scheme in the current environment is going to be difficult ... So it's very uncertain times, especially for the children that we care for," she said.

"They're the most important people in this whole scenario. Possibly forcing them into a different kind of childcare that might not fit them could be really detrimental to their development."

Wagga City Council general manager Peter Thompson said the "difficult decision" to end licences had been made after two years of running the RFDC scheme without federal government funding.

"The cost to us next year would be $250,000 as a net loss," Mr Thompson said.

In the email from council, seen by The Daily Advertiser, parents and educators were given until June 26 to make alternative day care arrangements

Ms Castle said the deadline left Wagga's FDC educators vulnerable to an end of financial year cut-off date from the federal government.

If educators could not find another scheme to register with and open under by then, she said, they could be ineligible for JobKeeper payments.

"Fingers crossed we'll find another scheme to take us on in the short amount of time we've been given," Ms Castle said.

Family Day Care is a system of childcare provided in an educator's home for a group of up to four children. Educators are partially funded by government payments which in Wagga had been coordinated by Council.

Peter Thompson said council would assist educators to transition to other licensed providers "so their service can operate through those providers rather than Wagga Council".

Options for educators may include being registered under licensed providers in Junee, Hume Billabong or Albury while continuing to provide services in Wagga.

"[It will be] business as usual for May [and] June but come next financial year we'd like to have everyone transitioned to another licence operator, or they may make a decision not to continue," Mr Thompson said.

"I take this opportunity to thank all those involved over that time for their contribution and care services to our community."

Mr Thompson said the NSW government's COVID-19 childcare package hadn't provided any support to what council did as an FDC licensee.

Wagga's Yvonne McAlister said she was "at a loss" after 20 years as an FDC educator.

"WWRFDC has not given us educators or our families in care any heads up ... [I was] confronted by this email just before my families arrived," Ms McAlister said.

One parent with children in day care said he was surprised by council's decision.

"It doesn't seem to make any sense that a city as big as us ... there's definitely a call for it. There's always a need for it," he said.