The college said it is still committed to serving all students and "to provide a welcoming environment and high quality education."
The new classroom will be a hub for business meetings, accounting, guest speakers and more.
The renovations at the Health Sciences Wing are set to create the Baptist Health Life Sciences Laboratory Suite, as well as a new entrance, storage spaces, two offices and two lab study areas.
Indianapolis-based IU Health, with 16 hospitals around the state, said it made the grant to try to ease a severe shortage of nurses.
Education officials say part of the problem is a lack of college graduates entering the field.
Last week, the Sellersburg, Ind. college made the announcement it would move to a "banded tuition" model and provide fixed costs for textbooks.
Mounting budget woes could force Ivy Tech Community College to close of up to a quarter of its school sites around Indiana.