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The university first announced it was holding consultations on the proposal last week.
Confirming the proposal in an email to staff and students yesterday, acting vice-chancellor Prof Helen Nicholson said it had not been an easy decision.
She had spent the past few days reading feedback and meeting staff before deciding it was the best path to take to deal with public safety and operational concerns the university faced under the traffic light system, and "a global pandemic which shows no sign of slowing down".
"Ultimately, mandatory vaccination gives us the safest way to operate the university in a manner that is as close to normal as possible, alongside our consistent health measures of masks, physical distancing where needed and good hygiene.
"This gives our students, the heart of our institution, the best chance to receive the high-quality education they expect from us."
It also offered reassurance to staff, she said.
The requirement takes effect from January 10.
The university had already decided on mandatory vaccinations for those staying in its residential colleges next year, and also has several staff, students and buildings affected by the Government’s public health order for health and education workers and workplaces.
Of the 3535 people offered places in residential halls for 2022, six have declined due to the vaccine mandate.
Prof Nicholson estimated that of about 5000 permanent and fixed term staff, there were between 30 and 50 who might not be vaccinated.
"We won’t be certain of numbers until after the policy comes into effect from mid-January, as staff will be able to be vaccinated up until this time.
"Up until and after this date, we will work with staff who remain unvaccinated and each case will be assessed individually.
"Options may include a change in duties, working from home, or cessation of employment."
Otago University Students’ Association president Michaela Waite-Harvey had previously said the association supported the decision.