Opal Australian Paper will officially stop manufacturing white pulp and paper at its Maryvale mill in Victoria's Latrobe Valley, having produced its last ream on January 21.
The move means up to 200 job losses for the region and comes after the end of a Victorian government guarantee to pay stood-down production workers.
The Construction, Forestry, Maritime, Mining and Energy Union lambasted the early end of white paper production in Australia as "disastrous" and blamed a lack of appropriate action by Opal and the Victorian government.
Opal pointed to its inability to source wood from state-owned supplier VicForests as the reason behind its decision to call time on white paper manufacturing.
White paper production at the mill was impacted late last year after VicForests was ordered to scale back harvesting after the Victorian Supreme Court found it failed to adequately survey logging coupes for two protected possum species.
It is appealing the decision.
On Thursday, Premier Daniel Andrews hit back at suggestions the government was partly to blame for the mill's closure, saying court judgements had "essentially put an end to native timber harvesting".
"The biggest thing that's caused the very unfortunate circumstances that those workers and their families face is not government policy but decisions of the courts and coupes that were set to be logged cannot be," he said.
White paper is made from the by-products of native timber, he said, meaning it effectively could no longer be produced once logging stopped.
Opal is planning to consult with workers and unions on job losses following its final decision to end production.
The company has proposed redundancies for 32 of the Australian Manufacturing Workers Union's maintenance workers, according to Gippsland organiser Steve Dodd.
But the AMWU is pushing for that figure to be closer to 12.
"We've asked for a whole range of information. They just come back bulls****ing to us," Mr Dodd told AAP.
The AMWU and the Electrical Trades Union could take Opal to the Fair Work Commission to contest redundancy numbers following consultation.
"Unions and the Victorian state government have been trying to work with Opal for some time to find short and long-term solutions and today's exit is a kick in the face," a spokesman for the electrical union's Victorian branch said.
"We remind Opal that they have responsibilities under the enterprise agreement and the union reserves all rights."
The Victorian government is working with the company to minimise redundancies and offer support services to affected workers.
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