A review of the Dauntsey's charity in 1887 allowed £1,400 for the foundation of an agricultural college. From 1891 a new governing body was established; there were 23 governors, eight of whom were appointed by the Mercers' Company, who had been responsible for the original school from 1553. In 1892 twelve acres of Plank's Ground were bought for £1,200 for the new school. Mr. C. Ponting was appointed architect and a school was planned for 50 boarders and 50 day boys; the estimated cost was £9,535. The old school, near the church, was sold for £1,000 and more land, on the Devizes road was purchased. Mr. F. W. Long was appointed the first headmaster of the new school.
The school was opened by Joseph Chamberlain on 7th May 1895 and although there were only five or six boarders and three or four day-boys in the first term this number had risen to 32 boarders and 20 day-boys by the autumn of 1896. However numbers had fallen a little by the time Mr. Long was succeeded by Mr. Solomon, in June 1899, when there were only 38 pupils. The school fell between its two target subjects of science and agriculture and numbers further declined. This led to a lack of fees and confidence, and the inability to pay for well qualified staff, despite the support of Lord Fitzmaurice, who had become a governor in 1893.
In 1908 Lord Edmund Fitzmaurice and his sister Lady Emily Digby paid the cost of the recently erected Isolation Hospital (Sanatorium), which came to £7,734. The school was still experiencing difficulties with a further drop in numbers but by 1919, when Mr. Solomon resigned after 20 years as headmaster, the number of pupils had risen to 53 boarders and 14 day-boys. The school was transformed when George W. Olive came from Oundle to become headmaster. He had a great sense of purpose and set about creating a 20th century public school, warning both governors and parents that they must be prepared for financial risks and higher fees. As a result he was able to offer increased salaries to attract better staff to the school. In 1921, thanks to a benefaction by S. W. Farmer, new farm buildings and workshops were built. By 1922 Dr. John Russell and H. G. Wells had been co-opted onto the governing body. By 1926 the numbers had risen to 91 boarders and 22 day-boys. With more buildings and a wider syllabus Dauntsey's was by now something more than an agricultural college and with the aim of having a school of about 200 boys Lavington Manor House was purchased in 1929. Until 1930 the agricultural course had been retained and there was practical training on a small mixed farm but the subject was dropped when the school became Dauntsey's School in that year.