The Victorian government has signed a deal to purchase the Heyfield Timber Mill, for an undisclosed sum.
Despite the purchase of the mill, there are still fears that up to 100 jobs could be lost.
Workers have said jobs are in danger due to a restructure induced by a reduction in the amount of timber ordered from the mill.
Hermal Group owner Ron Goldschlager expressed disappointment with the Victorian government for its handling of the sale. According to Goldschlager, the owners and staff were told by Victorian Premier Daniel Andrews that the mill and its 250 workers would be saved through the purchase.
The government has refused to disclose what it paid for the mill, however an independent valuation commissioned by Hermal Group suggested it could be worth up to $42 million.