The court in Gwangju, 265 kilometres south of Seoul, said the decision had been made to spare the students any further stress.
The ruling came as the court began to hear evidence in the trial of the captain and 14 crew, who are charged with criminal negligence and abandoning the passengers of the Sewol ferry which capsized and sank on April 16 with the loss of nearly 300 lives.
Among the dead were around 250 students from the same high school in Ansan city just south of Seoul.
Captain Lee Joon-Seok and three senior crew members are accused of "homicide through wilful negligence" -- a charge that can carry the death penalty.
The 11 other defendants are being tried on lesser violations of maritime law.
Some 50 witnesses are expected to give evidence and the court said the students' testimony would be given during a special session at a court in Ansan.
"This decision was taken in consideration of the students who live in the Ansan area and may have difficulty travelling such a long distance in the aftermath of the accident," a court statement said.
The session will take place between July 28-30 and will be closed to the public to protect the students' "privacy and mental well-being", it said.
Most of the 75 students who survived the disaster were set to return to normal classes at Dawon High School tomorrow.
It was not clear how many had chosen to testify in the trial.
The bulk of the charges against the crew arise from the fact that Lee and the others chose to abandon the 6,825-tonne ferry while hundreds of people were still trapped inside the heavily listing vessel before it capsized.
They were also condemned for ordering the passengers to remain where they were when the ship began listing.
A handful of crew members who stayed and tried to guide passengers to safety were among those who died.
Captain Lee's lawyer has vowed to challenge the homicide charge, citing the absence of any criminal intent on the part of his client.
The start of the trial's evidentiary stage today coincided with the recovery of another victim from the submerged ferry.
It was the first body to be retrieved from the interior of the vessel in 16 days.
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