FONTERRA will cut 44 jobs from its Echuca site in a bid to maintain the site's future competitiveness.
Under the proposed cuts, 38 staff will be made redundant, with six of the 44 jobs currently vacant.
The diary manufacturer says it will create seven new roles.
The changes follow a review into the company's manufacturing operations at Echuca.
Ingredients and operations director Bruce Donnison said the company remained "firmly committed" to manufacturing in Australia.
"We do not make these decisions lightly but we need to right-size the site against our current and projected volumes and keep the site competitive for the long-term," he said.
"Throughout the process, Fonterra Australia will work closely with the relevant unions and all affected employees and their families to support them and provide comprehensive outplacement, support and counselling services.
"Fonterra remains firmly committed to manufacturing in Australia and the future of the Echuca site."
The announcement does not affect any other sites in Fonterra Australia’s manufacturing network.
An exact date for the redundancies has not been made clear.