Bord na Móna is to close its peat briquette plant in Littleton, Co Tipperary next April with the loss of 69 permanent jobs.
A further 56 peat harvesting jobs in the area will also be impacted.
The announcement comes after the company met to discuss the future of workers at its two peat briquette plants in counties Offaly and Tipperary.
In a statement the company said it has now begun a process of engagement with union representatives and employees.
The company also confirmed it is planning to begin large-scale production of its new biomass briquette in the other peat briquette factory in Derrinlough, Co Offaly, which will remain open.
The Bord na Móna Group of Unions has said it does not accept the decision to close the Littleton plant.
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BNM Group of Unions Secretary and SIPTU Organiser John Regan, said: "Our members are very disappointed but not surprised by this move by Bord na Móna. We do not accept the decision to close the plant in Littleton and it will be opposed by our members by all legitimate means including industrial action."
He added that is "unacceptable" that the decision was taken without advance engagement with the unions.
Briquette sales have fallen in recent years, a market move attributed to the effect of carbon tax and a moderate winter.
The two plants are said to be operating at less than half of capacity with thousands of tonnes of stock built up.