The Whakatāne Mill has been given a lifeline after being slated to close earlier this year.
Owner SIG Combibloc (SIG) announced on Monday it had agreed to sell the mill to a consortium of investors, which would allow the mill to continue to operate.
More than 200 workers feared for their jobs after the Swiss company announced it was planning on selling the 80-year old mill in February.
SIG said the consortium of investors would be led by Dr Dermot Smurfit, who together with his other European consortium members, had "extensive experience in owning and operating paper packaging businesses".
A number of New Zealand investors are also in the consortium, the company said.
"We believe that the Whakatāne Mill has a very bright future as the only folding box board mill in Oceania, and we intend to invest heavily in the mill to support both our customers and New Zealand’s forest products industry," said Ian Halliday, a spokesperson for the Smurfit Consortium.
Halliday, who will become chairman of the mill, said production of liquid packaging board would cease, and the mill would focus on its customers' requirements for high-quality folding box board, carrier board and food service board going forward.
All senior management will remain with the new owners, with Juha Verajankorva, general manager of Whakatāne Mill Limited, saying today's news was a positive outcome for the company.
"This is a welcome development for Whakatāne and the wider Bay of Plenty region," he said.
"It's also great news for the New Zealand paper packaging sector and we appreciate the positive support of our workforce, our suppliers and customers in working towards this outcome which has been welcomed by all."