Hundreds of workers will lose their jobs after the announcement that Hazelwood power station, Australia's dirtiest coal-fired power plant, will officially close by the end of March.

Key points: French energy company ENGIE says station no longer economically viable

French energy company ENGIE says station no longer economically viable About 250 workers will remain at the power station until 2023 to manage the site's rehabilitation

About 250 workers will remain at the power station until 2023 to manage the site's rehabilitation ENGIE says it will sell off its Loy Yang B power station, which employs about 200 people

The plant, in Victoria's Latrobe Valley, employs about 750 people, with 450 direct employees and 300 contractors.

The company said about 250 workers would remain at the power station between 2017 and 2023 to manage the site's rehabilitation.

ENGIE chief executive in Australia, Alex Keisser, said the 1,600-megawatt power station was no longer economically viable.

"ENGIE in Australia would need to invest many hundreds of millions of dollars to ensure viable and, most importantly, continued safe operation," Mr Keisser said in a statement.

"Given current and forecast market conditions, that level of investment cannot be justified."

Mr Keisser called it a difficult decision and a difficult moment for all the employees.

"I want to thank them all, the past and present employees of Hazelwood, who worked diligently over last 50 years to produce low coast and reliable electricity for Victoria," he said.

"We have done different studies to see if we could transform Hazelwood to a biomass plant. We've looked also to see if we could repower it with gas.

"Unfortunately the power price today in Australia does not make any of these options viable."

Mine to be transformed into a lake

Mr Keisser said the company would fully rehabilitate the mine and turn it into a lake to be handed back to the community.

Sorry, this video has expired ENGIE Australia CEO Alex Keisser says the company looked at all other options before deciding to close the plant

He estimated it would be over a decade before the company concluded its business in Australia.

Workers were told this morning they would receive full entitlements.

One worker, Gary Sevenson, said the decision was "pretty heartbreaking".

Hazelwood is the oldest brown coal plant operating in the Latrobe Valley and is considered to be Australia's dirtiest coal-fired plant.

ENGIE also announced it would appoint a financial advisor to sell off its Loy Yang B power station, also in the Latrobe Valley, along with the Kwinana co-generation facility in Western Australia.

About 200 people work at Loy Yang B, Victoria's newest brown coal-fired plant which provides about 17 per cent of the state's energy needs.

Workers affected to receive government assistance

Federal Energy Minister Josh Frydenberg said the Commonwealth Government would offer a $43 million package for those workers impacted by the closure.

"This will comprise $3 million for job active assistance, retraining, other financial services support for those affected workers," he said.

"When it comes to the jobs in the Latrobe Valley and the future of those affected workers, the Turnbull Government is announcing today a $43 million package."

Victorian Premier Daniel Andrews said $20 million would go towards the set-up of a Latrobe Valley authority based in Morwell to help people in the region and act as "an important listening post" for the community.

"Making decisions with and for the Latrobe Valley, not dictating terms from Melbourne or further away," he said.

Victorian Government will 'stand by the Valley'

Mr Andrews also announced a $22 million package of "personalised support" for the workers.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 7 minutes 19 seconds 7 m Power station Hazelwood to close

"TAFE training, financial counselling, other emotional counselling if it is needed, all the sorts of supports that you would expect a good government to provide to each of those 750 workers and their families as they make a very difficult, very challenging transition away from these jobs," he said.

Mr Andrews said when the Latrobe Valley was on fire during the 2014 mine blaze that covered the Morwell area in acrid smoke and ash, the community did not get the support it needed from the Government.

"I want to make it very clear to every single member of the Latrobe Valley community, every business, every family, every individual, we will be there to stand with you and work with you to get through these challenges and to do the best we can to make sure that the Latrobe Valley is stronger than it has ever been," he said.

"I am optimistic and hopeful about that."

Modelling released by the Victorian Government on Wednesday showed the loss of Hazelwood's cheap, brown coal-fired electricity would push up household power bills by between 4 and 8 per cent.