State coal miner Solid Energy plans to close the Ohai open-cast mine in Southland at the end of June.
The company had hoped to keep the mine going until next year but diminishing reserves forced it to give up.
Most of the mine's 13 staff will be made redundant and some of the disused pits will be filled and planted in pasture or made into lakes.
Southland District Council says it is not surprised at the closure. The company had signalled its intention in 2007 when it lost a major commercial supply contract.