Bay of Plenty paper mill Tasman Mill will cease production by the end of June, with the approximately 160 workers being made redundant.
Norse Skog made the announcement today, citing the "secular decline of the newsprint industry", which had been exacerbated by Covid-19.
Kawerau Mayor Malcolm Campbell said the mill's closure is a "kick in the guts" for the local community.
He said despite knowing the day would eventually come, there are still a few "numb faces around the town".
He doubts there will be a buyer for the mill, following a decline in the newsprint industry, but said businesses may be interested in some of the assets on site.
The mayor said about 30 per cent of the current 160 workers live in the town.
He said it’s important families affected by today’s announcement are supported.
The mayor says projects like the Industrial Park, the Container Terminal and funding from the Provincial Growth Fund may help soften the blow.
The company's regional president, Eric Luck, said it would work with employees and their union representatives around making the closure process as smooth as possible.
"I know that today’s decision is disappointing and sad for many people. It’s the end of an era, but the structural change in the newsprint industry provided no viable alternative for paper production at Tasman. The domestic market for newsprint has shrunk considerably and so too have export markets. Covid-19 has hastened the decline," he said.
"Norske Skog acknowledges the great efforts of our dedicated team of people at the Tasman Mill, unfortunately today’s announcement is a reflection of the challenges that our industry has faced."
Luck said Norske Skog would work to conclude the sale process as quickly as possible.
"I would like to acknowledge and thank everyone who has worked at and for the mill over the last 66 years. It has certainly been an important contributor to the local and national economy."
The Tasman Mill commenced newsprint production in 1955 and has produced more than 15 million tonnes of paper during its 66-year history.