Stand downs at Opal paper mill from Jan 1

Dozens of workers at a paper mill in eastern Victoria will be stood down from New Year's Day due to a shortage of materials.

Some 37 workers at the Opal Australian Paper mill in Maryvale would be impacted immediately, according to an official from the Construction, Forestry, Maritime, Mining & Energy Union.

"There are another 120 workers who are currently finishing the paper that has been made," Denise Campbell Burns, Secretary of the Pulp and Paper Workers District, told AAP on Friday.

"Their jobs will be impacted (or) subject to stand downs by the end of January (and) early February"

Opal previously warned it may have to stand down workers or stop making some products due to a dwindling supply of timber.

The paper mill was due to run out of materials to make white paper by December 23.

Its supplier, government-owned timber business VicForests, was ordered to scale back harvesting in parts of East Gippsland and the Central Highlands where two endangered possum species live.

VicForests has appealed the Supreme Court decision.

AAP approached Opal but did not receive a response in time.

Australian Manufacturing Workers Union organiser Steve Dodd confirmed some workers involved in white paper production would be stood down on full pay from New Year's Day.

Workers at the Latrobe Valley mill are represented by several unions and AAP also approached the Electrical Trades Union for comment.

On Friday, a Victorian government spokesman confirmed it had reached an agreement with Opal to make sure all stood down workers would receive full pay an entitlements without accessing leave.

"Discussions are ongoing with Opal on options to further support the mill's long-term operations," they said.

Ms Burns welcomed the financial support but said it did not represent a long term solution.

"We call on Opal to make a commitment to continue producing the paper and paper products Australians love and rely on," she said.

"Only Opal's commitment will ensure that all workers at the mill can continue in the jobs."

The Maryvale mill is one of the biggest employers in the Latrobe Valley and the area is still reeling from the loss of other major employers such as the Hazelwood power station.

Earlier in December, a VicForests spokesperson told AAP it had stopped all timber harvesting and engaged experts to create new practices in line with the court order.