After 56 years of paper production, the mill is set to close some time this year, putting 75 workers out of a job.

The construction union's Jack Evans said it was a sad day.

"We have been expecting an announcement of some description and hoped it wouldn't be about closure," he said. "We hoped the finishing end would keep going but we have learned this is not the case and the company will close the operation.

"By the end of May we will have a clearer picture on how that process will fold out."

Mr Evans said the mood at the meeting with company representatives was sombre.

"We knew the announcement was coming but no one wants to hear it. It is going to be hard on the workers and the community," he said.

"We expect the machine floor to close first, then the finishing end and then yard gangs."

The company did agree to the union's request to stand down the workforce for the remainder of the day and the night shift as they came to terms with the announcement.

"It gives the workers and their families the chance to absorb the information," he said.

Mr Evans said the mill had been in survival mode for seven years, with the campaign to encourage people to buy Australian Paper and especially Shoalhaven made paper ramped up in the past three or four years.

"Orders were slowly coming in but it was too little, too late," he said.

He said there would be little chance of workers transferring to other mills within the company, simply because the "mills aren't there anymore".

"It is going to be difficult. Unemployment is high in the Shoalhaven as it is. A lot of the guys have worked 20 years plus, doing the same work and training based around paper making and processing.

"They will have to find a whole new set of skills.

"I believe some people will have to move out of the area for work."

In a statement issued on Tuesday afternoon, Peter Williams, Australian Paper's Chief Operating Officer, said the market for specialty and security papers had continued to experience a "significant and sustained drop in demand".

"Unfortunately, this has made the ongoing operation of the site progressively unviable," he said.

"We understand this decision will be difficult for employees at Shoalhaven who have witnessed machine closures at the site in recent times as market conditions have deteriorated."

First published as Australian Paper Mill to close, 75 jobs to go.