Lactalis Australia is closing its Rockhampton, Qld, milk factory in response to falling milk production in Queensland.
The company announced on Wednesday the factory would close on February 28.
It said the decision was not taken lightly.
The factory had not been processing at full capacity for a number of years and was only in operation three to four days per week with redirected milk supplies from south-east Queensland, the company said.
The company will be also scaling back production of yoghurt at its South Brisbane factory this year.
Milk production in Queensland has plummeted in recent years - down 14.7 per cent in the five months to November 30 alone.
The state recorded the biggest fall in production in 2018-19 at 10.2pc, almost double the national average.
Its 2018-19 production of 358 million litres comprised just 4.1pc of the nation's total.
Queensland Dairyfarmers' Organisation president Brian Tessmann said the closure was inevitable, given Queensland's declining milk production in the past decade.
"While this certainly will be a devastating blow to those employed at the Rockhampton plant, the closure should not affect the dairy farmers currently supplying to Lactalis," he said.
"Production into the Rockhampton factory has been sporadic for a while now.
"Milk produced in the Central Queensland region for Lactalis will simply be transported down and processed in either the Nambour or South Brisbane factories.
"Only farms around Biggenden and to the north have had their milk going regularly to Rocky."
Lactalis said it would continue to buy milk from its dairy farmers in the Rockhampton region and redirect it to Nambour and Brisbane.
"Queensland fresh milk will continue to be produced in our Queensland factories with Queensland employees using the milk from Queensland family-owned farmers," the company said.
Yogurt manufacture will transition to Lactalis factories in Victoria and Tasmania, which would reduce transportation requirements of milk between the states.
The company said the welfare of its 47 employees at Rockhampton was its top priority.
"We're very sorry to be ceasing our factory operation in the tight-knit Rockhampton community," the company said.
"The Rockhampton factory has been part of the Lactalis/Pauls family for 30 years.
"Lactalis products will still be sold via our local distributor and available in local stores."