Around 200 workers face an uncertain future after engineering company Babcock International said it would stop building ships at a historic shipyard in Devon.
The yard's future had been in doubt after the government's decision in July to suspend bidding on type 31e frigate warships.
Babcock said it had "taken the difficult decision" to close the Appledore facility in Devon next year. It will end its lease on the site in March 2019.
"Babcock's focus is now firmly on its workforce and its determination to protect their employment within the business," the company said.
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"To that end, the company will offer relocation opportunities for all 199 Appledore employees at other Babcock facilities, 140 of whom are already on short-term redeployment to its Devonport operations.
"Babcock very much regrets having to take this course of action and recognises the impact it will have on its dedicated and professional workforce.
"The company will now engage in a consultation period, working closely with its employees and their Trade Unions representatives during this difficult time."
In 2017/18 Appledore generated around £24m of the Group's total underlying revenue of £5.4bn.