Car manufacturer Toyota will close its Altona plant in Melbourne's west in October, with the loss of more than 2,500 jobs.

Key points: Toyota will cease production in Australia on October 3, 2017

Toyota will cease production in Australia on October 3, 2017 More than 2,500 workers will lose their jobs

More than 2,500 workers will lose their jobs The company started Australian manufacturing in 1963

Three years ago, the company revealed it would not make cars in Melbourne beyond 2017, but the exact date of closure was not known until today.

At the time, the company blamed the "unfavourable Australian dollar", high costs of manufacturing and low economies of scale.

Toyota said staff would drop from almost 4,000 to 1,300 people when it stops manufacturing and moves most of its white-collar workforce to the city.

In a statement, the company said the plant would stop building Aurions in August, Camry Hybrids in September and Camry petrol models in October.

Toyota Australia president Dave Buttner said employees would be supported to prepare for the future.

"We remain extremely proud of our rich manufacturing history which spans over 50 years," he said.

"Our employees are committed to producing vehicles of the highest quality as we work towards our goal of 'last car = best global car'."

'Relief' for workers seeking certainty

The Australian Manufacturing Workers' Union (AMWU) said the announcement actually came as relief for a lot of staff, after years of uncertainty.

"They can now get on with their lives and organise around a date, they know when they'll be leaving the plant, so for many of them in a very bad circumstance, it is a positive," AMWU's Dave Smith said.

Sorry, this video has expired Toyota workers talk about the announcement the manufacturer's Altona plant will close.

But Mr Smith said it would be tough for workers to compete with an estimated 40,000 people who are employed by the broader industry.

"There's going to be so many people coming onto the jobs market at the same time, it's not just Toyota, it's the component suppliers and all the other industries associated with them," he said.

"The company has put in a support program … it's made a lot of training available to people and people have taken that up.

"But at the end of the day you can provide all the training in the world, but there's got to be jobs there to go to."

The company said it intended to produce 61,000 cars by the year's end - 26,000 for the domestic market and 34,000 to be sent overseas.

The announcement comes more than three months after the last-Australian made Ford rolled off the production line in Victoria.

Ford was the first of the big three carmakers to switch off the factory lights after the demise of the local industry was announced in 2013.