The university said that the more than 500 professors, researchers and administrative employees who will lose their jobs amounts to 7.4 percent of the university's combined workforce.
Of the cuts, 209 employees will be fired outright while 323 positions will be either be eliminated or vacated voluntarily.
“It is a huge loss of knowledge and competencies to lose so many good employees. We have found the largest portion of the cuts in administration and service in an effort to spare education and research as much as possible but it still means that important support functions for students, researchers and educators will disappear or be carried out to a lesser degree,” university rector Ralf Hemmingsen said.
In addition to the job cuts, the university said that it would take on ten percent fewer Ph.D. students in the upcoming years.
“We are making cuts in the crucial food chain of research. This will impact Denmark's research abilities in five, ten and 20 years,” Hemmingsen said.
The Venstre government's budget for 2016 means the the University of Copenhagen, Denmark's largest with nearly 41,000 students spread across four campuses, will lose out on an estimated 300 million kroner per year, the university said.
The government defended cuts to the budget for upper secondary education and universities by arguing that Denmark already spends more on education per capita than any other nation.
Denmark was the OECD country that spent the most of its wealth on education in 2012, the latest year for which data was available, the organisation said in November.
The nation spent five percent of its GDP on educational institutions, followed by Norway (4.9 percent) and Iceland (4.5 percent).