The Newcastle Herald can reveal that the deal with Broadspectrum – previously Transfield – will be torn up before the end of the year. It comes less than two years after the university signed a five-year, $88 million management and maintenance contract for its campuses, prompting widespread protest from students and staff.

Reports of physical and sexual abuse suffered by asylum seekers and refugees at both detention centres are common. Last year a report by Human Rights Watch and Amnesty International claimed asylum seekers held in Nauru were suffering “severe abuse”.

The university did not comment on why the contract had been cancelled, but Tim Buchanan, a University of Newcastle student and spokesman for campus activist group Students Against Detention, said he believed the university had “bowed to student pressure”.

“Staff and students have been very active on this issue, and we’re told on a regular basis that the university is quite fearful of the brand damage they’ve suffered,” he said.

“I think them cutting the contract with Broadspectrum is a really great step forward.”

A university spokeswoman confirmed it had “reached agreement” with Broadspectrum to “progressively transition out of the current maintenance and facilities services contract before the end of the year as part of its revised estate management strategy”.

The spokeswoman said the decision was “about the future of our Estate Management Strategy”.

“Our priority is to ensure that we continue to deliver high-quality and efficient maintenance and facilities services for the benefit of our staff and students,” the university spokeswoman said.

She said “the only payment to Broadspectrum will be for its continued service provision as we transition out of the contract”.

The news comes a day after the unveiling of the university’s new $1.1 million advertising campaign was disrupted by the National Tertiary Education Union’s concerns at the possibility of hundreds of job losses as a result of an ongoing staff review.

The union claims 170 of the more than 1700 full-time and casual professional staff could face redundancy.

However the university criticised the union for raising “a suite of disconnected issues in an attempt to detract from the great achievements of staff and students, which was the focus of [the] launch of UON’s new brand campaign”.

The university spokeswoman said the decision to cut short its contract with Broadspectrum “is not part of the broader organisational design project at the university”.

While Mr Buchanan welcomed the news that the university had cut its ties with Broadspectrum, she aid students on campus would continue to campaign for it to adopt an “ethical investment and procurement policy” that would see it refuse to be involved in the detention industry.

“We’d like the university to adopt an ethical clause saying they will not be involved in the offshore detention centre industry,” he said.

Broadspectrum’s contracts on Manus Island and Nauru are due to end in October this year.