Tolko Industries Ltd. announced plans in September to close the mill in The Pas next month because it was no longer financially viable.
That would have thrown 300 people out of work.
American Industrial Acquisition Corp. then sent Tolko a letter of intent to purchase the mill, subject to several conditions.
Workers at the mill have voted to accept a 10 per cent wage rollback for five years and given the new owners a three-year holiday from making pension solvency payments.
The province is allowing the mill’s new owners to defer pension contributions for three years while the town has also agreed to a tax holiday.
The mill will now be operated by Canadian Kraft Paper Industries Ltd., a company affiliated with American Industrial.
Premier Brian Pallister said the government is thrilled with the agreement.
“We offer our congratulations to all those who have worked so diligently to bring this deal to a close in the best interests of all Manitobans,” he said in a release.