National news agency the New Zealand Press Association is to be wound up after 132 years of work, the Herald understands.

Staff were called to a meeting late this afternoon where it was announced the organisation is under review.

NZPA employs about 40 journalists and provides up to 1000 news items to New Zealand's news outlets each day.

New Zealand Press Association chairman Michael Muir said the move was sparked by major shareholder Fairfax, which had given notice of withdrawal from the co-operative.

"Whatever the outcome there will be new opportunities and in some cases more competition," Mr Muir said in a statement.

Up until 2006 all New Zealand newspapers shared their news content, which was distributed by NZPA, but since then its journalists had produced independent content that was provided to all shareholders and was also sold to a number of third parties.

Mr Muir said NZPA would continue operating as usual in the meantime.

The Engineering, Printing and Manufacturing Union (EPMU), the union that represents journalists, said it was a huge loss for journalism.

"A national news agency is an essential part of a healthy democracy," said national industrial officer Paul Tolich.

"Every nation needs a news gathering and dissemination organisation that can provide news feeds 24 hour a day, seven day a week, to all news media outlets, regardless of their ownership.

"The dedicated staff at NZPA has done this for decades, some of them investing their working life in the agency."

The EPMU and the company have agreed to consult on arrangements prior to the closure.