Senior sources say the university will still play a key role in the school for 14 to 19-year-olds, including offering mentoring, facilities and expertise. But the move means the school must be classed as a Technical Academy rather than a UTC - unless another university steps in.
The consortium behind the project - led by Oxford and Cherwell Valley College (OCVC) - wants to increase the catchment area to a 15 mile radius following a request from Wokingham Borough Council and concerns from other schools that it will drain their pupils.
OCVC spokeswoman Natalie Wignall said: "Discussions are still ongoing about the classification of the new facility as a UTC or Technical Academy. The nature of the school will not be affected by whether it is a UTC or Technical Academy - it will continue to be a technical centre offering unrivalled opportunities to 14 to 19-year-olds wanting to specialise in computer science and engineering."
Reading University spokesman Alex Brannen said: "The University has actively supported a free school for 11 to 19-year-olds, which was designed to meet a pressing need for school places in east Reading and provide an excellent general academic education, as well as specialist technical skills and knowledge.
"However, the university will be happy to consider acting in partnership with others, if a different model of school emerges. The University is committed to working with all schools in the region. "
A deal to find a site for the school will be completed in the next few weeks, with many signs pointing to the vacant Reading College site in Crescent Road, owned by the University of West London.
Ms Wignall said the partners - which include Microsoft, Cisco, Network Rail, Peter Brett Associates and Reading School - are "hopeful" its preferred site will "soon be confirmed", and the September 2013 opening date still stands.
The original bid submitted to the Department for Education was for a UTC-style school for pupils aged 11 plus, but the Government plumped for an over-14s UTC. Official consultation on the proposed school will begin next month.