The spokesperson for NHS Surrey and Sussex ICB said Eggtooth had been given notice the funding would come to an end.
A one-year extension was agreed to support a planned and smooth transition to other mainstream services, they said.
They added there was a range of support available for young people from the NHS, alongside voluntary and community services.
Eggtooth says it has supported more than 900 young people experiencing mental health challenges in the last two years.
It says it is seeing “rising demand” and “increasing levels of distress among young people”.
The Department for Health and Social Care has been approached for comment.