The firm was set up in 1891 and had been run by three generations of the Ralls family. The south coast builder employed 26 staff, although many local subbies depended on the company for work.
Ralls Builders concentrated on contracts for local councils and was building the first council houses in Portsmouth for more than a decade (pictured).
The council will now need to find another builder to take on the job, which has been designed by architects Re-Format.
Administrator James Tickell, of Portland Business and Financial Solutions, said the firm had been running up losses this year and simply ran out of money.
Ralls’ collapse will leave a gap in framework agreements with The First Wessex Housing Group, The Improvement and Efficiency Partnership South East, Portsmouth City Council and Southampton City Council.