After years of speculation and concern, the Cadbury factory in Dunedin will finally close next year, leaving about 350 people facing an uncertain future.
Staff were told of the closure at a meeting on site at 10am.
Mondelez International, the owner of Cadbury, confirmed the closure this morning, telling its staff 200 people would be made redundant by the end of the year.
About 100 people would remain with the business until early next year when the factory would close.
More than 70 per cent of the products manufactured at the site were exported, most to Australia.
The business had absorbed the additional costs associated with Dunedin production for several years, but Australian sites could deliver production volumes at the same quality as consumers expected, area vice-president for Australia, New Zealand and Japan Amanda Banfield said.
''This is an incredibly difficult announcement, given the factory's proud history and the outstanding performance of our employees.
''Our people in Dunedin are among the best performing teams in the region and, if it weren't for their dedication and outstanding performance, the factory might have closed some time ago.''
Workplace Relations and Safety Minister Michael Woodhouse, a list MP based in Dunedin, said it was disappointing that despite considering a range of options, Mondelez had decided it could not keep manufacturing operations in Dunedin.
''My thoughts go out to the more than 300 staff who may be affected. Today's news will be a big shock to them, many of whom have worked at the factory for most of their working life.''
Woodhouse called for the city to rally together to help minimise the effect it would have on staff and the city, by helping to provide possible retaining and redeployment options.
Dunedin South MP Clare Curran and Dunedin North MP David Clark said the loss of 362 jobs was shattering for the people working there and for the city.
"I have visited the factory many times and appreciated the warm welcome, kind hospitality, and good cheer of the staff,'' Clark said.
"These people have been proud to work at this iconic Dunedin institution, and proud to supply products for export with a global recognition. My heart goes out to them.''
Curran said the workers had expenses to meet and families to feed and it would take time for the news to sink in.
Closures like Cadbury's affected whole communities.
''Employment changes affect mortgages and schooling choices. It is too soon to grasp the flow-on effects, but we can be certain this will have a huge impact across Dunedin.''
For the next year, it was imperative that central government, civic leaders and the business worked together to ensure all of these workers had the training opportunities they need to find alternative employment, the MPs said.
Security guards have been posted outside the popular tourism attraction Cadbury World, which is closed today but will reopen tomorrow.
Disappointed tourists have been approaching the door and walking away.
It is understood factory night-shift staff were sent home early and were among those asked to attend this morning's meeting.
Staff spoken to outside the plant this morning were reluctant to comment, saying they knew little about what was coming.
One woman entered the building beating her hand over her heart, and a man said it was only the second time in 20 years all shifts had been called to the same meeting.
"Things haven't been going well for a while," he said.
Another worker said they had been told not to answer questions from the media.
Cadbury World to remain open, Jaffa race in doubt
Tourist attraction Cadbury World will remain open despite the planned closure of Cadbury's manufacturing plant.
The company said it remained committed to Cadbury World, which attracts 110,000 visitors a year.
It did not specify how the attraction, which features a chocolate waterfall and tours of the chocolate-making process, would be affected by the closure.
"The company is ready to invest in redevelopment work to make Cadbury World an even better visitor experience," Banfield said.
The company last month signalled a future expansion of Cadbury World.
A final decision on the proposed redevelopment of Cadbury World would be made by April.
The future of the annual Jaffa race, in which thousands of the round sweets race down Dunedin's Baldwin St, is in doubt. The event has been going for 15 years and raises money for charity. Last year an estimated 15,000 people crammed into Baldwin St - the world's steepest - for the race. About 75,000 Cadbury Jaffas were rolled down the 19-degree gradient track.
The 2.8g balls go as fast as 100km/h (or 28m a second) on the street, which drops from 100m above sea level to just 10m over 350m.
There are usually three races, with 25,000 of the chocolate-filled red sweets in each race.
- additional reporting Chris Morris and Vaughan Elder