The owner of the Kopu sawmill near the small Coromandel town of Thames has confirmed it will be shut down, with the first redundancies for the 145 staff likely to come into effect at the end of the week.
Mill owner Carter Holt Harvey told workers three weeks ago they were considering the closure, as there was excess capacity in the industry.
Production will continue until the plant shuts at the end of June, the union representing the workers said today.
Engineering, Printing and Manufacturing Union national timber organiser Alan Clarence said its workers were coping with the closure and would head into a strong job market.
"(They've) had three weeks to get used to the idea and have worked to produce proposals for the company to consider, but at the end of the day they are all likely to head into other work and have a good union-negotiated redundancy agreement to fall back on. So it's the best of a bad situation."
Mr Clarence said there was still hope the closure may not be permanent.
"As we understand it the plan is to mothball the plant rather than break it down and ship it out, so there may be a chance it starts up again when the timber market picks up."
EPMU national secretary Andrew Little said it highlighted the importance of having a decent redundancy agreement.
"Given the closures we're seeing around the country, we think it's time the government legislated for a minimum redundancy so all New Zealanders can have some protection between jobs."