Pharmaceutical giant, Glaxo Smith Kline, has pulled out of building a new £350m biopharm drugs facility in Ulverston.
The decision throws doubt onto the future of the town's existing site, which could be sold by GSK.
employees work at the Ulverston site.
South Lakeland District Council says it will work with GSK to find a buyer and to continue the operation of the facility.
GSK management says there will be no immediate impact on employees.
In pharmaceuticals, the company is to undertake a strategic review of its cephalosporins antibiotics business, with an option to sell the business including the associated manufacturing facilities. These medicines are produced at GSK sites in Ulverston, Cumbria, Verona in Italy and part of its Barnard Castle site in County Durham.
South Lakeland District Council says it is 'shocked and disappointed' at the announcement.
We have been in meetings and discussions with GSK in the last few weeks about unrelated matters and there was no suggestion that this announcement was on the horizon. We will work with the company, the local MP, town, county and district councillors and Cumbria LEP to offer whatever support is necessary.