Hampton Affiliates has announced it will rebuild the Babine Forest Products Sawmill in Burns Lake, B.C.

The decision was made unanimously at the company's board meeting Monday night.

The sawmill was destroyed by a devastating explosion and fire in January that killed two workers, and injured 19 others.

The mill was the town's largest employer, and the fire put an estimated 250 people out of work.

Al Gerow, chief of the Burns Lake Indian Band, says a cloud of despair has now lifted from the town.

"Collectively, the community of Burns Lake has been holding its breath since the tragedy of January 20th, and you know, today was a day of celebration for the community because we are now going to be able to get the sawmill rebuilt."

In September, Hampton Affiliates and B.C. Jobs minister Pat Bell announced the mill would only reopen if certain conditions could be met, including adequate timber supply, and if the company was able to work out agreements with the community of Burns Lake and area First Nations.

The new mill will be about two-thirds of the size of the previous mill.

Construction will begin in early 2013, and the mill is expected to be up and running by 2014.