The college, due to open in 2015 in Desertcreat, Co Tyrone, is planned to be a world leader in training services for the police, prison and fire and rescue services.
The initial plans for a state-of-the-art police school on the 210-acre site were first announced in February 2004, with the development due to be ready in 2009 at an estimated cost of £80 million.
The Assembly Committee for Justice was briefed on bids lodged from competing firms, but did not divulge detailed financial information due to commercial sensitivities.
The entire project has reportedly been estimated at £140m.
"Detailed investigations have been carried out on behalf of the Desertcreat Programme Board to identify what led to the significant difference between the anticipated costs and tenders received," a DOJ statement said.
"Specific remedial actions have been identified and agreed with the Design Team consultants."
A DOJ spokesperson said that work is underway to identify options to reduce costs, without compromising the functionality of the college.
Work is due to start on the College later this year, which will create up to 2000 construction jobs.
But the project may be further delayed due to the setback.
The DOJ said they would appoint a preferred bidder when they are updated of the changes.