In 1978, the Jesuits closed the school after redonating to the Diocese of San Pablo the lot where the Ateneo campus was located.

Bishop Alfredo Versoza of Lipa invited the Jesuits to establish a school in San Pablo, at the time under his diocese's jurisdiction.

Progress was significantly delayed, however, by the Second World War and the destruction of the seminary buildings that the Jesuits were supposed to occupy.

By July 1947, when the Ateneo first opened its doors, its premises had five classrooms, a library of about 2000 books, offices, a basketball court, and three living rooms, as well as 69 first-year students.

The Jesuit administrators decided to return the Ateneo's buildings to the diocese after a request from the new bishop, Pedro Bantigue.

The last graduates of the Ateneo received their diplomas on March 31, 1978, and the school was then reopened as the diocesan Liceo de San Pablo.