Army cadets at Fremington camp last year
Accommodation at the Second World War training camp is due to close on October 1 and the infrastructure at the site will be sold.
The camp, which had undergone a review by Defence Training Estates South West was said to be "past its sell by date" by South West Army spokesman, David Harris.
He said: "The Fremington site is worn out and has come to the end of its economic life.
"Buildings at the camp are 1940s stock — old, wooden huts that are very expensive to maintain. It's just not worth pumping any more money into."
The camp is largely seasonal, with the majority of occupation taking place in the summer months.
The site currently hosts 12 employees who work for the DTESW management partner, Landmark.
The staff are currently under consultation and, while three employees may be able to relocate to RAF St Mawgan in Cornwall, the remaining nine will lose their jobs.
Fremington councillor Rodney Cann, said: "My first reaction is that I am very upset to hear about the job losses.
"We'll be sad to lose this camp — there was always something interesting and exciting happening there.
"However, my major concern is that there is around 50 acres of development land there and there will be a lot of pressure for massive residential development — you could fit an awful lot of houses into that space.
"Fremington has already had more development for a town of its size than anywhere else in North Devon and this could have a major impact on its infrastructure — we would certainly need a new school."
Although the camp and accommodation will be sold off, troops will continue to train on Braunton Burrows using Okehampton army camp as their base.
Lt Col James Porter, commander for DTESW, added: "This relocation will enable us to reduce the number of permanent beds in the region while retaining the ability to surge bed numbers in the summer. Job losses are regrettable but the overall benefit for troops and training is a positive benefit."