But there will be a continued focus on cost reduction.

The news comes at the end of a long campaign that saw a delegations lobbying state and federal governments to purchase Australian steel for government-funded infrastructure projects and workers vote to accept cuts to their pay and conditions.

Some workers also effectively voted themselves out of a job as redundancies will be part of the $200 million cost savings target that needed to be reached to keep the steelworks open.

In an announcement to the stock exchange on Monday morning, BlueScope CEO Paul O’Malley said the board had voted to continue steelmaking at Port Kembla, subject to the ratification of the new enterprise agreements.

Earlier this month, BlueScope workers voted in principle to accept the changes to conditions but a secret ballot is needed to formally accept the new agreement.

There will be 500 job losses – 300 in manufacturing and 200 in support and services.

Mr O’Malley’s presentation said the $200 million savings would not be a one-off.

“Given further declines in steel prices, the business must continue to reduce costs, improve operational efficiency and meet competitive challenges,” Mr O’Malley said.

The company said the savings were expected to improve the bottom line by 40 per cent in the first half of this financial year compared to the second half of 2014-15.

This was approximately $50 million greater than the previous outlook and was due in part to the “earlier than planned delivery of company-initiated cost reductions”.

‘‘We applaud the contribution by our employees, site management and the combined unions in helping to secure $60 million per annum in labour cost savings,” BlueScope chairman Graham Krahe said.

“This was an essential step in creating a more flexible and productive steelworks.”

The state government’s decision to defer $60 million in payroll tax payments over the next three years among other reductions also contributed to cost savings.

“The arrangement we have struck demonstrates the government's clear support for our employees, our businesses and the Illawarra and it has been a key component in the board’s decision to keep the steelworks open,” Mr Krahe said.

The company statement makes no mention of any concessions from the Federal Government.