Mabey Bridge has begun a consultation on the planned closure of its business in Station Road where 150 people work.
It is also looking for a buyer for its renewables section in Mathern, Chepstow, which employs 180 people.
A company spokesman said it anticipated a buyer would be found to support that area of the business.
"We have not made these decisions lightly and we understand that this is a very difficult time for our people." the spokesman added.
BBC Wales understands the firm is now looking for employees to apply for voluntary redundancy.
One employee said: "Everyone's absolutely stunned, some people guessed what was going to happen but the majority had no idea at all.
"The announcement today is that the infrastructure side is gone, that it will finish. It was just shock, complete and utter shock; very few could believe that they have taken such as drastic decision."
The company's infrastructure section makes highway bridges, railway bridges, footbridges and sign gantries while its renewables division builds wind turbine towers and carries out work in offshore renewable energy.
Analysis, Brian Meechan BBC Wales business correspondent
Mabey Bridge is a big name in construction. As specialists in bridges, it is one firm that would have been expected to weather the difficult economic times the sector has been through.
In recent years, it has branched out into renewable energy including the towers for wind turbines.
The construction industry is expected to grow by three percent a year until 2018 so the future might have been considered promising.
But the Mabey Bridge site in central Chepstow has been up for sale for months and may prove appealing for redevelopment for housing rather than further industrial uses.

The Irish were dismissed for 181 in 46.3 overs as several of their batsman, including top-scorer Ed Joyce (46), got out playing poor shots.
Bangladesh sealed victory in the 28th over with Soumya Sarkar unbeaten on 87.
This was another untimely Irish display with the game's bosses set to decide on their possible Test status next month.
Mustafizur Rahman did much of the damage in the Ireland innings as he took 4-23 after dismissing opener Paul Stirling in the second over, with the Irish still to get off the mark.
Home captain William Porterfield chipped an easy caught-and-bowled dismissal to Mosaddek Hossain to leave the Irish on 37-2.
A mini-revival as Ireland moved to 116-3 abruptly ended as Niall O'Brien (30) became the first of three Mustafizur victims in a six-over period to leave the home side on 136-7.
O'Brien's brother Kevin top-edged the left-arm seamer to Mosaddek while Joyce was also out during that calamitous spell for the Irish as he went down the pitch and slogged spinner Sunzamul Islam straight to Sabbir Rahman.
Lower-order batsmen George Dockrell (25) and Barry McCarthy (12) put on 35 for the eighth wicket before their departures saw Ireland quickly in the pavilion.
Only a series of early dismissals would have got Ireland back into the game but instead Sarkar and Tamim Iqbal put on 95 for the first wicket as the visitors strolled to the most emphatic of victories.
Joyce acknowledged Ireland "didn't bat well enough" after suffering a defeat arguably worse than the seven-wicket rout by England in Bristol earlier this month.
"I thought lots of the senior players, including myself, got out very cheaply. We'll look to put that right on Sunday against New Zealand," said the former England player.
Ireland were competitive for much of last weekend's game against New Zealand at Malahide and will need a similar display or better on Sunday to take pressure off coach John Bracewell and his struggling side.
An engineering firm has announced the proposed closure of one site in Chepstow and the sale of another, putting 330 jobs at risk.
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Ireland suffered another chastening defeat as Bangladesh clinched an eight-wicket win with 22.5 overs to spare in the Tri-Nations game in Dublin.