But rather than cutbacks of sawlog harvesting levels being the culprit, a lack of a market for hardwood products is the major reason behind the decision.

Woodward Timber Products started in 1937 and at at its peak employed almost 40 people. Now only a few remain as the final logs are processed at the Woodman's Hill site.

Some, like director Don Woodward, have been at the firm for the more than 50 years.

Formerly processing timber from Creswick and Wombat state forests, the mill has relied on private timber in recent times.

Mr Woodward said 80 to 90 per cent of the hardwood market had disappeared in recent years - replaced by radiata pine and materials like steel post and panels for fencing.

He said there was no doubt more sawmills would soon cease to exist.

"They will close because they haven't got the market anymore."

Mr Woodward said while the selling price of timber had remained steady, costs such as insurance premiums and workers compensation had gone through the roof.

The new sawlog harvesting levels would do little to help the plight of sawmills.

A fourth-generation sawmiller, Mr Woodward says now is the time to move on.

"I've been here 54 years and I always liked to see what I had to do tomorrow - not last week or last year."

"It has been a way of life."

The final closing date for the sawmill will be determined by the time it takes to process the final couple of dozen logs remaining at the site.

The company's Bungaree Preserving Plant will continue to operate.