THE Shell Clyde Oil Refinery ceased operations at the end of last month and the job of converting the site to a storage and distribution terminal has begun.
The oil refinery was the oldest in Australia, having operated since 1920.
The refinery employed about 310 people but is expected to need only 50 to 60 workers once the conversion to a distribution terminal was completed.
Shell spokesman Paul Zennaro said about 200 people would still work at the site during the shutdown and conversion but the majority would then be made redundant.
"Obviously, regrettably, there will be fewer jobs once that conversion is finished," he said.
"But we have been really keen to work with our colleagues and employees at Shell to provide them counselling, training and career advice."
Mr Zennaro said Shell was now working through the development application process to decommission the refinery and remove redundant machinery and infrastructure.
That would include remediating contaminated land, he said.
About 40 to 50 hectares of the site is expected to be freed for other uses once the terminal is in operation.
Phil Reid, the Australian Manufacturing Workers Union organiser for dozens of maintenance staff at the refinery, said most workers had been happy with Shell's redundancy offers.
But he said the loss of so many skilled jobs in Parramatta would be a significant loss for the local economy.
"The big thing for the community is the loss of these permanent jobs and a future training base for apprentices," he said.