A spokesman for the company said that NZAS was facing 'unprecedented external challenges' exacerbated by low international metal prices and a strong New Zealand dollar.
Tiwai is majority owned by Rio Tinto Alcan who earlier in this year approached power supplier Meridian Energy to renegotiate a power supply agreement due to come into effect in 2013.
The smelter is powered by electricity from the Manapouri Power Station, which was built in 1970 for the specific purpose of feeding the Tiwai facility.
The planned redundancies are designed to make the smelter 'resilient in any market conditions' according to general manager Ryan Cavanagh.
Those losing their jobs will be paid two weeks for every year served up to 52 weeks, according to the Engineers, Printers and Manufacturers Union (EPMU).
Tiwai has a 750-strong workforce and is accountable for 9% of Southland province's GDP.