Avana Bakeries in Newport, has been given a lifeline after its owners found a new buyer.
Its owners, 2 Sisters Food Group, confirmed that the site has been sold.
A spokesperson said: "It is proposed to operate the business under a new company, Food Utopia Ltd, which will aim to secure continuing operations. We will now commence the TUPE transfer process of colleagues."
A South Wales bakery employing around 650 people is set to close this summer.
Avana Bakeries in Newport says keeping the site open is no longer viable after losing its principal contract with Marks and Spencer, as Megan Boot reports.
The Secretary of State for Wales said the closure of Avana Bakeries in Newport is 'very sad'.
Local Assembly Member, Rosemary Butler, has described the closure of Avana bakery as "absolutely devastating".
A Newport bakery which employs 650 workers will close.
Avana Bakeries first announced that jobs were at risk in February, after the loss of a major cake contract.
Company bosses said their priorities is to minimise the number of redundancies by looking to redeploy staff to other areas.
In a statement, the company said: "We will now work with all our colleagues and our customers to implement a phased closure, which we anticipate will end by summer."
Six hundred and fifty Welsh bakery workers are facing the threat of redundancy after Marks and Spencer moved a massive contract to north-west England,
People working at the giant Avana Bakery in Newport have been told that the entire site could close because of the decision.
The Welsh Government has voiced support for Avana Bakeries following news that 650 jobs could be lost there.
Marks & Spencer says it will do "all it can" to support Avana Bakeries following its decision to use another cake supplier.
A spokesperson said: “As part of our work to further improve the quality of our food supply chain, we are consolidating some of our fresh desserts and cakes business and moving from two suppliers to one.
"It’s not a decision we’ve taken lightly and understand that it will have a significant impact for Avana Bakeries. We’ll do all we can to support the supplier through the process."
A spokesperson for Avana Bakeries in Newport has confirmed the majority of its 650-strong workforce is at risk of redundancy following the loss of its M&S contract to a competitor.
The spokesperson added there is also a risk the site could be closed.
Oldham-based Park Cake Bakeries says it is pleased its partnership with M&S will continue.
A spokesperson for the business said: “Park Cake Bakeries has had a long and fruitful relationship as a supplier of quality cakes and desserts to Marks and Spencer and we are pleased that partnership will continue with the award of M&S’s cakes and desserts business, primarily to our site in Oldham.”
Around 650 workers are at risk of redundancy at Avana Bakeries in Newport following a decision by Marks & Spencer to cancel a contract, it has been confirmed.