An emergency meeting will be held in Pine Falls, Man., on Tuesday for provincial officials to talk with local politicians and residents about the planned sale of a local paper mill amid a labour dispute.

Montreal-based company Tembec said earlier Tuesday it plans to sell its newsprint plant, where more than 250 unionized workers have been locked out since Sept. 1.

Tembec is the town's largest employer. The workers are represented by the United Steelworkers union.

Pine Falls Deputy Mayor Jack Shwaluk said many townspeople have spent their lives working at the mill. He worries that if it doesn't reopen it could be devastating for everyone around the community 130 kilometres northeast of Winnipeg.

"I'm not sure how successful they'll be in finding jobs elsewhere, so the impact could be enormous — not only to the families, but to the businesses and to the entire community," Shwaluk said.

"If this mill should shut down, it would be very, very devastating to the area."

In the wake of Tuesday's news, Manitoba has set aside $1 million for a "community adjustment committee" to set up projects that will aid workers heading into an uncertain future.

Jennifer Howard, provincial labour minister, said the closure of the mill is a "traumatic event" for workers.

"We will do everything we can to help them cope with the impact," Howard said in a release.

Premier Greg Selinger will speak at the meeting, scheduled for 4 p.m. CT.