The company announced on Wednesday it will transfer production of the breakfast favourite and stop producing granola cereals.

Vita Brits has been made at Wahgunyah since 1989 when Uncle Toby's bought the brand from Nabisco and transferred production from that firm's plant in Broadmeadows, Melbourne.

Nestle will contract another food manufacturer to produce Vita Brits with a deal to be finalised.

The move follows a review finding it should focus on oats and ready-to-eat cereals such as Weeties, Cheerios and Plus varieties.

Redundancies will be offered on a voluntary basis up until next March with around 370 workers to remain at the plant.

Nestle has spent $12 million on equipment to make ready-to-eat cereal brands.

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CPW Australia general manager Spencer Bartlet said that Nestlé was saddened to shed jobs.

"This doesn't reflect on the personal efforts of our staff," Mr Bartlet said.

"It has been based on a careful consideration of how to focus our activities and resources, recognising the need to focus on our strengths to keep our business profitable as the breakfast cereal market changes."

Production of snacks, such as muesli bars, at the factory is unaffected by the changes.