The Northcote school is one of only five Maori boarding schools in the country.
Dunn cited concerns including the tiny roll and the impact of that on the curriculum that can be offered, school finances, breaches of an integration agreement.
There had also been a breakdown in relationship between the board of trustees and Hato Petera Ltd, Dunn said.
"I know this will cause some uncertainty for families with sons and daughters attending Hato Petera.
"I also recognise that Hato Petera College has a proud history...however, on balance, I believe the time is right to make informed decisions on the future of the school."
The tiny Northcote school last year closed its junior boarding facility, saying it could no longer provide a supportive environment.
At the time, Whanau Trust Board chair Lance O'Sullivan said the closure was temporary, and a comprehensive review of the boarding facility was ongoing, working to address financial issues and the school's current hostel model.
The Herald has previously reported about issues at the school, including the roll falling below 100, dilapidated buildings, bullying, infighting and a lack of confidence from its owner, the Catholic Church.
There are also concerns from some in the school community that the church wants to sell off the valuable school land, and a Waitangi land claim complicating relationships in the school community.
Two other Auckland Maori boarding schools, St Stephen's and Queen Victoria, were closed in the early 2000s.
Last year Education Minister Hekia Parata signed-off on the closure of Turakina Maori Girls' College in Marton due to financial difficulties and a falling roll.