Kiwirail takes full responsibility for its partial closure of Hillside Engineering Workshops and the redundancy of 90 workers, board of directors chairman John Spencer says.
Mr Spencer said the Government should not be blamed for KiwiRail decisions.
The decision to sell Hillside was not made quickly or lightly, but there was simply not enough work for the facility to be kept running in its current state, he said.
"KiwiRail's management team and board looked very carefully at the options for the future of Hillside. This included the forward work opportunities and the sale.
"We know this has been hard on the staff and our priority now is ensuring as smooth a transition for them as possible," he said.
Hillside workers and members of the Rail and Maritime Transport Union blamed the National Government and KiwiRail board for this week's shock announcement.
They accused board members and those in the relevant ministers' offices of rejecting commercially viable options for future work at Hillside.
In response, Mr Spencer said the board and management team took full responsibility for the "hard decisions" which had to be made to ensure the future of KiwiRail's 4000 other employees.
"These decisions are ours, not the Government's. Our priority is to ensure a sustainable future for KiwiRail in which it no longer has to rely on government handouts and can, therefore, eventually determine its own future," he said.
Prime Minister John Key's office also rejected claims the Government was responsible for Hillside's demise.
A spokeswoman Mr Key said Hillside job losses were not the result of Government directives.
She said the previous government bought KiwiRail for $700 million when it was not a commercially viable business, and despite "significant" taxpayer investment since then, it still could not stand alone.
"This Government is investing $750 million in KiwiRail over three years as part of a turnaround plan to ensure there are many more jobs at KiwiRail in coming years.
"The Government regrets news of job losses whenever they occur," she said.
The Government had no plans to sell KiwiRail, which was trying "very hard" to become financially self-sustaining by 2020, the spokeswoman said.