The DOE decided to scrap the co-location and focus on improving the existing school after a public hearing last week where hundreds of parents, teachers and students spoke against it.
"Through a thorough process of both analyzing quantitative data and listening to qualitative feedback from families, we decided to withdraw the proposal," Schools Chancellor Dennis Walcott said in a statement.
"I.S. 2 still has work to do to deliver for its students, but we believe that with additional targeted supports, the school can improve."
Walcott, along with Deputy Chancellor Saskia Levy Thompson, visited Principal Adrienne Stallone at the Midland Avenue school on Tuesday afternoon to announce that the plan was being withdrawn.
Teachers outside the school on Tuesday said they were happy with the DOE's decision and were glad the city would try to improve the school's performance.
"I think everybody's excited," said Alicia Brancato, a seventh-grade English teacher at the school. "Everybody was relieved."
The proposal would have scaled back the student population of I.S. 2 and added the second middle school to the building starting in 2014.
The school was originally chosen for co-location because it received three consecutive C grades on its DOE Progress Report over the past three years, the DOE said.
Instead of a co-location, Walcott said the DOE plans to develop a plan to improve the school's performance, as part of the Middle School Quality Initiative (MSQI).
Plans will include additional funding for reading materials, 20 days of coaching from a MSQI coach and development of a system to track reading comprehension growth, the DOE said.