Mayor Tony Herbert said the city council would offer support to the affected workers.

"As an immediate priority, the council has been in contact with Fonterra and state government to seek confirmation that all eligible support programs will be made available to impacted employees, including counselling support," Mr Herbert said.

"Fonterra have confirmed that all impacted workers will receive their full entitlements and redundancy pay.

"Warrnambool has a number of established employment agencies which are in a good position to connect workers with new employment."

He said the council understood there would be many families upset and distressed by Fonterra's decision.

"The Dennington site has a long history of dairy and food production," he said.

"Many people will have an emotional connection to the place and this is something we have seen with the connection that people have retained with the former Fletcher Jones manufacturing site.

"When the time is right the council will engage with Fonterra to discuss future plans for the site."

Mr Herbert said the closure would affect the city's economy.

"The loss of close to 100 jobs will have an impact," he said.

"It is important to note that this is not an immediate closure and that over the next six months workers will have time to investigate other opportunities.

"Warrnambool's 16,000 plus workforce has reported sustained periods of growth but the loss of close to 100 jobs will have an impact.

"The immediate priority is with impacted workers accessing the appropriate support programs."

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