The company is attributing the decision to a lack of trees for harvest, blaming the mountain pine beetle epidemic, wildfire losses and weak lumber markets.

In a statement, President and CEO Brad Thorlakson called the decision "difficult but necessary."

"Unfortunately, we do not have enough economic fibre to keep all of our British Columbia mills running efficiently and productively," Thorlakson said.

The announcement means 150 jobs will be lost in Quesnel and 90 will be lost in Kelowna, the company said.

Thorlakson said human resources staff and representatives from an employee assistance program will assist employees who have been laid off.

The provincial government was quick to issue a statement in response, blaming long-term trends in forestry for Tolko's move.

In a statement of his own, Doug Donaldson, B.C.'s forests minister, said supply shortages caused by mountain pine beetle were "inevitable."

"The industry accelerated harvesting to take advantage of beetle-killed forests, knowing full well that the newly available timber supply was finite," Donaldson said.

"In fact, industry consultants Jim Girvan and Murray Hall predicted closures several years ago."

Donaldson called for collaboration between government, forestry companies, First Nations and unions to develop solutions.

Quesnel mayor Bob Simpson echoed comments about the mill in his town being in trouble as it faced multiple obstacles.

"We've always suspected that the Tolko operation in Quesnel ... would be looking at a permanent closure at some time," Simpson said.

"But it's always terrible when it eventually comes."