Regional Development and Agriculture minister Jaclyn Symes said her thoughts were with Fonterra workers and their families following the company's decision to shut the facility.

"Fonterra Australia has ensured that all affected employees will receive full entitlements and redundancy payments, as well as support program and counselling," she said. "The Labor Government's Workers in Transition service has been activated to support affected workers."

She said the government had been advised of the closure shortly after workers were notified at 3.30pm on Wednesday.

The Workers in Transition service delivers information sessions to workers facing retrenchment to help set them on the path to getting a new job. This includes information about skills and training services, getting ready to apply for jobs, financial information and small business services for anyone considering starting their own business.

The government advised retrenched workers who may be at risk of being unemployed in the long term would also be able to access services through Jobs Victoria to help them get into a new job.

South West Coast MP Roma Britnell said it was undoubtedly a tough situation for workers and their families.

"It's also tough for the Dennington township," she said.

"The factory has been the beating heart of the community for decades."

She said she had received a briefing from Fonterra and urged the company to ensure the workers leaving their jobs had appropriate supports in place to help find new employment.

"The dairy industry is going though major challenges, but this announcement will come as a shock to many," she said.

MP Martin Pakula said his thoughts were with the factory workers.

"Sad to hear the news of the pending closure of Fonterra Dennington," he tweeted. "As the dairy industry organiser for National Workers Union I spent more time at that (Nestle) factory than almost any other workplace. We negotiated some great EBAs and I met some of the best people I will ever know."

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