The company delivered the news to workers this afternoon. The plant was expected to shut down in November.
A union delegate confirmed the news to RNZ.
He said a handful of workers would keep their jobs to process imported timber.
The future of the factory has been up in the air for the last two weeks after the owners began consultations on closing the plant.
Owner of Morrissey's clothing store Larry Sullivan said most of the plywood factory workforce were locals.
It was a hard time, but people were focused on taking care of each other, he said.
"Everybody is sort of worried about individuals, you keep reeling off names when there's a few guys standing around at the pub, 'how's this guy getting on', 'how's that guy getting on'.
"So yeah, a lot of caring I think, and yeah, it's just one punch after the other sort of thing at the moment."
