Rosyth-based DEW Pitchmastic announced on Wednesday that it had gone bust, prompting employees to down tools and walk away from the Kirkcaldy site.
It is the latest and biggest setback to hit the project, which has been dogged by delays since work began in August last year.
Work was believed to be running six weeks behind schedule, meaning that the project was due to be completed at the end of next month. However, this is now highly unlikely given the latest developments.
Dr Bob McLennan, head of the Fife Council's transportation services, said: "Our first priority is to ensure public safety. We're currently arranging for the sites to be made safe and they'll be secured until such time as work can be resumed.
"Obviously we're very disappointed about the situation, and are seeking legal advice, but we also have to await the appointment of an administrator. I'd like to reassure the public that bus services will continue to run on the existing arrangements."
Kirkcaldy councillor Alice Soper said she wasn't surprised the company had gone bust, and she was scathing in her criticism of the work already undertaken at the station.
"I thought the workmanship was shoddy and the working practices were very poor," she said. "The slabs that have been laid are squint and some of them are even crumbling, and I had to phone health and safety to get them to stop workers cutting slabs close to passengers and covering them with dust.
"It is an absolute disgrace and I would like to find out who awarded that contract. They are obviously not a reputable company."
DEW Pitchmastic was appointed by Fife Council to construct four bus stations in Fife after the Scottish Executive granted the local authority a £4 million Public Transport Award two years ago.
Plans for Kirkcaldy bus station include the construction of a new glass-fronted main building, new stances with electronic information, wider walkways, raised kerbs, improved lighting and a CCTV system.
Work has also stopped at stations in Glenrothes, Leven, and St Andrews.