Foyle Food Group is to close its factory at the Derryloran Industrial Estate by the end of August.
The beef processing facility employs 82 people and the company said it hoped to redeploy staff where possible.
A spokesperson said the group remained a market leader in the red meat sector, but that a rationalisation of processing capacity was necessary.
They said: "We regret the decision to close the Cookstown facility, but this is a necessary consolidation of the group's operations across our larger and more modern UK facilities, where we have made significant investment in recent years.
"Focusing processing at these sites will allow the group to remain a market-leader within the competitive red meat sector.
"We understand the impact that this proposal will have on our Cookstown workforce.
"Consultation with staff will begin immediately and we hope to redeploy as many as possible to our other plants."
Ulster Unionist Party councillor Trevor Wilson described the news as "a complete bombshell to the workers and their families."
He said: “As Chair of Mid-Ulster Council’s Development Committee I have asked for an urgent meeting with the owners and the plant’s management team to discuss what can be done to help the workers affected and to see if anything can be done to save these jobs for Cookstown.”