More than 300 jobs at the Driver and Vehicle Agency in Northern Ireland are to go.
All motor tax offices are to close with all licensing services transferred to Swansea in Wales, Stormont Environment Minister Mark H Durkan announced today.
Coleraine in Co Derry will be hardest hit as part of the centralisation move, as 235 jobs will be lost there.
Mr Durkan said it was devastating news for the DVA staff and their families.
He said an assessment by independent economists estimates the knock on impact will equate to the loss of around 500 jobs, removing £22 million from the Northern Ireland economy.
SDLP MLA John Dallat, whose east Derry constituency includes Coleraine, said Mr Durkan was on his way to the United States for St Patrick's Day when London confirmed the announcement.
First Minister Peter Robinson and Deputy First Minister Martin McGuinness are both in Washington.
Mr Dallat said: "The workers are devastated, feel abandoned, let down and trampled upon.
"This decision demonstrates very clearly the low priority Northern Ireland has when it comes to decision-making and it calls into question the sincerity of the Tories when they claim they are on the side of rebuilding our economy and pointing to a better future for everyone."