The bakery in Manchester, England was acquired by the company in 1991 to house a chilled pastry production line but recorded losses of over £3m (€4.4m) before interest and tax in the 2005-2006 period.
Jettisoning the ailing pastry business is the latest attempt by the food group to claw back faltering profits after a sales slump, factory fire and profit warning all in the last year.
As part of a drastic restructuring plan, Northern Foods are now focusing on six of its most profitable sectors - pizza, biscuits, ready meals, sandwiches and Christmas puddings.
Closing the Manchester factory will result in a one-off charge of around £12m (€17.7m) before tax in the first half, including the £7m (€10.3m) incurred in cash closure costs. The company expect this loss to be partially offset by proceeds from future sale of the assets.
Northern, who produce Goodfellas pizzas and Fox's biscuits, announced in May that it would be selling 40 per cent of its business and rebranding 50 per cent of products.
At the time, Chairman Anthony Hobson said: "We have major challenges ahead as we restructure and refocus the business in a very competitive trading environment."
However in July the company suffered an unexpected setback when fire broke out at one of its bakeries. It is thought the fire caused around £4m (€5.8m) worth of damage to property and loss of business, which produced speciality bakery goods such as muffins, doughnuts and buns.
The company's annual results this year showed a substantial drop in profits before tax and restructuring items from £62.2m (€91.9m) to £45.1m (€66.6m)