Boeing plans to close an engineering component factory at Bankstown in south-west Sydney.
The jet plane manufacturer says the jobs will be transferred to a plant in Melbourne by the end of 2012, creating 300 new jobs there.
The ABC reports 350 personnel at Bankstown have been offered redundancies or the opportunity to transfer to Melbourne. They were advised of the decision on Thursday morning.
Boeing says both factories have been operating at 50% capacity which is the reason for the closure.
New South Wales Premier Kristina Kenneally says the closure decision was disappointing, but it was a commercial decision.