Victoria's largest coal-fired power station will close four years ahead of schedule.
EnergyAustralia told staff on Wednesday its Yallourn Power Station in the Latrobe Valley will close in mid-2028, despite being licensed to operate until 2032.
"While the announcement may have surprised some of our people, its context didn't," Managing Director Catherine Tanna told reporters.
"We are acutely aware that the world of energy is rapidly changing as we transition to cleaner forms. Getting that approach right is something I've long been passionate about."
Ms Tanna said the company will construct a 350-megawatt battery in the Latrobe Valley by the end of 2026 to increase energy availability before the plant's closure.
"This will provide energy for up to four hours at a time, and is larger than any battery operating in the world today," she said.
The company is planning a "multimillion-dollar support package" for about 500 affected workers.
"Coupled with up to seven years' notice, it means our power station and mine site people will have the time to plan, re-skill or retrain," Ms Tanna said.
"We are determined to show Australia, that it is possible to move from the old to the new in a way that does not leave people behind."
EnergyAustralia executive Liz Westcott acknowledged the news would be tough for workers.
"We cannot forget that this may be a tough time for our people at Yallourn, some of whom have had family working at the plant dating back decades," she said.
"They're the ones, working on the hot days, delivering the electricity that keeps all of us cool."
Yallourn supplies up to 22 per cent of Victoria's electricity and eight per cent of Australia's.
It's also the site of the nation's second-largest open cut brown coal mine and has been operating for 100 years.
