The chairman of a taskforce set up to help expand Ulster University's (UU) campus in Londonderry said he did not believe job cuts at the university would leave the plans in jeopardy.
UU said on Wednesday it was to make up to 450 staff redundant.
Staff were informed of the potential job cuts at an online meeting held by the vice-chancellor, Prof Paul Bartholomew, who said the university hoped to achieve this through voluntary redundancies, but compulsory redundancies could not be ruled out.
A spokesperson for the Department for the Economy (DfE) said the expansion of the campus remained "a clear ministerial priority".
The expansion of the university in Derry - commonly known as Magee Campus - has long been regarded as a catalyst for economic growth in the north west.
It has 6,500 students with a target to reach 10,000 by 2032.
The 10,000 student target was included in New Decade, New Approach (NDNA), which restored Northern Ireland's power-sharing executive in 2020.
Speaking to BBC Radio Foyle's North West Today programme, Stephen Kelly, the chairman of the taskforce working to expand the campus, said expansion plans were still on track.
Kelly said his thoughts were first and foremost with the staff at UU following the announcement on Wednesday, describing it as "a horrible situation that no one wants to find themselves in".
He said he understood why the announcement of proposed redundancies would lead to concerns being raised about their project.
"Where we are in the process right is that the next phase is largely about building out the capital requirement," Kelly said.
"That involves integrated design teams, procuring services, building the infrastructure, rather than just the expansion of student numbers, so for now this announcement doesn't really have huge amounts of jeopardy in terms of our project."
Kelly said the university leadership had "a legal responsibility to ensure that the organisation is sustainable and achieves the level of funding required to pay its bills", adding that this is the conversation they are currently involved in.
"Where we are as a taskforce is that we are building for the future, so what happens whenever the next big growth of students is due in 2029, we have the facilities available for them and hopefully by that stage there will be some sort of settled sustainable budget that allows our higher education institutions to thrive."
Social Democratic and Labour Party MLA for Foyle, Sinead McLaughlin, previously raised concerns about how the announcement could impact the long-awaited plan to increase student numbers at the campus.
"When you expand student numbers at Magee, that means expanding administration services, that means expanding support for new buildings and everything else," McLaughlin said.
"It actually means recruitment rather than job losses, so that announcement and the priority of government for the expansion of Magee just don't marry up."
In a statement, the DfE said the expansion of the campus remained "a clear ministerial priority as demonstrated by the 22% increase in student numbers over the last two years".
"The minister [Caoimhe Archibald] has ensured that all funding required to date for the Magee expansion has been secured and as Magee is a top priority for the minister she remains fully committed to the programme's delivery."
A UU spokesperson said the taskforce reports had always "clearly stated that a sustainable higher education funding model is a pre-requisite for growth. A sustainable funding model is not yet in place".
"Ulster University is committed to viable, sustainable growth in Derry~Londonderry; it is not viable to grow an unsustainably-funded model,"