Councillors voted 4-3 to decommission the yards at a controversial gathering attended by more than 150 people.

The yards will close on June 30 next year.

Cr Ben Blain moved the motion to close the facility along with other conditions including the council commissioning a future strategic land use plan for the site and adjacent buffer zone land.

The motion was seconded by Cr Vicki Jellie.

Crs Blain, Jellie, Max Taylor and mayor Debbie Arnott voted for closing the yards, while Richard Ziegeler, Otha Akoch and Angie Paspaliaris voted against.

The vocal crowd had to be urged to be quiet a number of times during the meeting with tense exchanges taking place between the audience and Cr Arnott.

Cr Blain said the decision had been "a long and drawn out saga".

"Over the past five years the yards have run at a loss," he said.

"The facility is a burden to ratepayers and this will continue to grow."

He said the saga had invoked a lot of emotion and he was sorry it had taken so long to get the required information to form a view on the saleyards.

He said successive councils and administrations had under-invested in the facility, labelling the recent construction of a roof over the holding pens a "patch up".

But he said he couldn't change the decisions of the past.

"The opportunity to build a state-of-the-art facility has now passed," Cr Blain said.

"Purely on a financial basis for council I believe the decision is clear."

When Cr Blain started to list problems with the saleyards - such as the walkway collapse, cattle escaping, and WorkSafe's prosecution case - it prompted a vocal response from the crowd.

It was one of a number of interruptions from the crowd prompting Cr Arnott to call for quiet. "If you can't be quiet you will be asked to remove yourself from the meeting," she said.

Cr Jellie voted for closing the yards, saying as a councillor group "we have been left with one of the most difficult decisions in our entire term".

She said expert information on the saleyards had been released publicly last week.

She said an upgrade of the yards was financially not viable.

She said threats and untruths had spread through the Warrnambool community.

"This process has only been made more difficult by rumour and misinformation circulating in the community about supposed conflicts of interest, the validity and intention of council processes and information and straight out threats made has shown a downside of the Warrnambool community that I am disappointed exists," Cr Jellie said.

"This has impacted not only me personally, and through no fault of their own has impacted my own family and others involved in this process with these untruths having the potential to lay waste to their integrity."

She said the council made a "huge mistake" 10 years ago by not addressing the saleyards issue.

But Cr Jellie said the councillors needed to make a responsible financial decision.

"We cannot leave a significant financial burden for generations to come," she said.

She said iconic businesses such as the Fonterra, Woollen Mill, Fletcher Jones had closed their doors and the city had survived.

Cr Richard Ziegeler voted against the proposal and said the "Warrnambool saleyards was much more than a financial entity".

"If we vote to close the yards, then only if it's gone we will find out what happens to our community," he said.

"It is a critical part of the way of life for people from across the region. It's a social construct for many farmers and it's too flippant to tell them to go to a Men's Shed.

"I will not allow my vote to help destroy the livelihoods of many and complicate the lives of others and create issues of animal welfare."

Cr Max Taylor said his heart made him lean towards keeping the yards, but his business ethics told him it wasn't viable.

Cr Akoch said the council had an obligation to upgrade the yards and keep it open for years to come.

Cr Angie Paspaliaris said the financial picture of the yards was "dire" but voted to keep the yards.

"The community's majority response is to keep the facility," she said.

"The community is telling me one thing and the financials are telling me another."

In voting to close the yards, Cr Arnott said councillors could not place a financial burden on ratepayers for the next 20 years.

Farmers and stock agents as well as ratepayers attended the meeting, urging councillors to invest in its failing asset.

The meeting became heated at times, with angry members of the public yelling out.

Minhamite's Sherin Almack asked two questions about the yards, concerning animal welfare if cattle had to travel to selling centres further away and a plan and cost for decommissioning the yards.

The crowd was vocal after responses to her questions by chief executive officer Peter Schneider and Ms Almack requested clarification, however was told to sit down by Cr Arnott.

"I will remind the gallery that we must have quiet and allow us to proceed with the meeting," Cr Arnott said.

The crowd also called out at times while councillors spoke on the issue and Cr Arnott called for quiet, saying people would be asked to leave.

Written and electronic petitions were received by the council, with 1500 combined signatures lodged by Warrnambool stock agents to keep and upgrade the saleyards at its current Caramut Road location.

The council agenda stated it was recommended councillors vote to cease to operate the South West Victorian Livestock Exchange as a selling yards by June 30 next year.

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