The company said the changes were due to a realignment of its operations division "to better reflect the changing needs of the organisation", and at least one position could be re-deployed.

MI's operations general manager Alan Shea said the changes would reposition the operations team to "realise the full benefits of our investments in modernising and automating our infrastructure so that we can continue to deliver water to our customers in the best way possible".

"We have tried for several years to keep the workshop running by catering to external business and servicing staff vehicles," Mr Shea said.

"Unfortunately, having a separate vehicle workshop in two locations is no longer viable."

He said some streamlining of existing functions had led to new roles being created with some team members being promoted to take up new challenges.

Whilst the Leeton office remains open, it is the end of an era for MI's Leeton mechanical workshop, which will close its doors for the last time.

"We have tried for several years to keep the workshop running by catering to external business and servicing staff vehicles," Mr Shea said.

"Unfortunately, having a separate vehicle workshop in two locations is no longer viable."

Leeton mayor Paul Maytom said even one job loss in the shire was one too many.

"It's devastating for those affected and their families," Councillor Maytom said.

"These things tend to have a multiplying impact. We know it's really tough out there at the moment, so this really isn't great for our community. The impacts will be widespread.

"We are trying to seek clarity from MI about what this restructure means for the future of the business moving forward and their operations in Leeton.

"We're hoping to sit down with them in the coming days."

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The Australian Workers Union said "no one saw this coming" and would also be seeking more information from Murrumbidgee Irrigation.

"No-one saw this coming, let alone the workers who were completely blind-sided. The business unit was profitable. Our mechanics were busier than ever and have had successful external contracts with major employers across the region, including Essential Energy, for many years," AWU vice president south-west NSW organiser Ron Cowdrey said.

"All they have been told is that their work will now be contracted out and those jobs will leave Leeton forever."

"This is not to the time to swing the axe on a profitable business and add to the growing job toll across the country.

"We should be maintaining and supporting local jobs and businesses (now) more than ever, especially ones that are profitable.

"Contracting these roles will not only destroy livelihoods, it will also lead to a far poorer service provided to the entire Riverina community."

MI has said the changes will not mean any reduction in customer service levels.