By the end of 2012, Vale will suspend operations at the Frood portion of Stobie Mine.
Angie Robson, a spokesperson for Vale, said no workers will be laid off.
The 85 people employed at the mine will be deployed to other areas of operation.
Robson said the decision is based on declining metal prices and falling demand for Vale's products.
"We've been mining at Frood for more than 100 years, it's largely a remnant area, the grades are very low and it just doesn't make any economic sense," Robson said.
Robson said metal prices have dropped 50 per cent since Vale took over Inco.
All collective agreements between employees and Vale will be honoured with this decision.
Sudbury Mayor Marianne Matichuk said the decision is unfortunate, but adds it's reassuring the company has committed to relocating the employees.