KiwiRail will axe 90 jobs at its Hillside Workshops in Dunedin by the end of January, but the company says it is hoping to redeploy staff elsewhere.
Redundancy for the Hillside workers will begin on January 31, if they choose not to take a job elsewhere in the company.
There will be 18 jobs for Hillside workers at the workshop's foundry, which has been purchased by Australian manufacturing company Bradken, and seven positions are ringfenced for Hillside staff at the KiwiRail Freight heavy lift facility.
Staff are also being offered 20 positions in the transition team responsible for completing Hillside's current projects, closing down parts of the site and helping transfer work to KiwiRail's Hutt Workshops.
KiwiRail says 30 staff will go on special paid leave from December 7, as will a further 35 staff from December 21.
The company is accepting voluntary redundancy applications from Hillside staff who do not want to be redeployed, and from other employees who are in similar roles elsewhere in the company.
The Rail and Maritime Transport Union (RMTU) is blaming the government for the job losses.
The union says Hillside workers have been in limbo since April, when KiwiRail announced it was seeking a buyer for the 130-year-old workshops.
RMTU general secretary Wayne Butson slammed the announcement as "the final chapter in a sad tale of ideologically driven decisions by the minister of transport and his political puppets on KiwiRail's board".
"Ever since it was decided to buy cheap and shoddy rolling stock from overseas, we've all been picking up the tab, and now we're going to pay even more as most of these skilled workers head off overseas," he said.
Dunedin South Labour MP Clare Curran has asked the Auditor-General to urgently investigate KiwiRail's buying decisions, the government's involvement in those decisions, and the impact they have had on the Hillside workshops.