KiwiRail has sold off part of Dunedin's Hillside Railway workshops, a decision the Rail and Maritime Transport Union says could cost up to 90 jobs.
Hillside was put on the market by KiwiRail in April, which said it couldn't keep running the railway machinery plant without enough work lined up.
KiwiRail delayed a sale decision in August, saying consultation with buyers was taking longer than expected, and on Thursday it confirmed it wasn't able to sell the whole Hillside business.
Instead it has agreed to sell the foundry to the Australian company Bradken.
KiwiRail's freight business will operate the heavy lift facility and the rest of the site will be closed down over the next few months.
KiwiRail didn't say how many of the staff, numbering about 120, would lose their jobs but the union estimated about 90 jobs would go.