A working party of Dunedin city leaders has been set up to try to keep some production of Cadbury products in New Zealand.
Mondelez International announced last month it planned to end manufacturing operations in the city and move production to existing Australian sites.
Confirming the decision this morning, area vice-president Amanda Banfield said after four weeks of consultation with employees and the E Tū union, no viable options had been found to save the factory.
The factory employs more than 360 people.
Mondelez would offer a support package to redundant workers and retraining for those who wanted to relocate to Australia, Ms Banfield said.
A working group had been set up to look for a New Zealand manufacturer to take over production of sweets such as Pineapple Lumps and Jaffas, she said.
Tourism attraction Cadbury World would stay open.
Ms Banfield was optimistic about the chances of finding a suitable local manufacturer.
"Through consultation we've already had one manufacturer approach us who has similar capability to ours in that area," she said.
"What we need to do now is work with them to explore whether they can absorb the volume that we'd be talking about and whether they can match our quality and taste."
Dunedin Mayor Dave Cull is in the working party, along with Labour MP Clare Curran and local business associations.
Mr Cull said Mondelez would have the final say on whether to approve a local manufacturer.
"They've made it clear if they do sub-contract, then the supplier has to meet their quality standards, which they say are among the highest in the world," he said.
"It's not really something that I as mayor, or the council or even some of the other stakeholder groups will have much control over."
The working party should also work to support the numerous contractors who would be affected by Cadbury's closure, he said.
Cadbury workers told RNZ today they knew there was no hope the factory could be saved after Mondelez slated it for closure, saying it wanted to move production to its Australian facilities.
The workers, who spoke anonymously because they said they were still not allowed to speak to the media, said at least a decision had now been made after weeks of speculation about the factory's future.
They were relieved they had good redundancy packages.
E Tū spokesman Neville Donaldson said although the union did what it could to save more than 360 jobs during the consultation process, it was having to work through layers of Mondelez bureaucracy.
"We were obviously dealing with reasonably senior people but not decision-makers," he said.
"What we found during the process was there was quite a bit of adjournment to allow for local management to get guidance and decisions from further up the chain.
"You've got to assume from that, that the decision was made elsewhere and the decision was confirmed elsewhere."
Union delegates will continue meetings with Mondelez next week.