A business review which concluded that there was no prospect of new UK armoured vehicle manufacturing work once production of the Terrier ends next year. BAE said Newcastle site would close at the end of 2013.
Managing director Charlie Blakemore said:
We need to adapt to very challenging market conditions and further reduce our overheads to drive better value for our customers and increase our competitiveness in the export market.
I know that this is difficult news for employees and we will do all we can to help them through this difficult period and mitigate the proposed job losses wherever possible.
The firm said the proposals, now under consultation, followed major efficiency improvements and reductions in the amount of ammunitions required by the Ministry of Defence.
More top news
A police raid uncovered what is believed to be cocaine that had been stashed in nappies, and 40 cannabis plants.
The prince attended the rugby match in his role as patron of the Invictus Games Foundation, the official charity for this year's game.
The prime minister pitched her comments firmly towards unionists in her first campaign visit to Scotland ahead of the general election.