Ford Motor is to close its Bridgend engine plant by September 2020, according to reports in national newspapers.
Sources say that workers at the plant were informed of the decision on Thursday morning.
The closure would affect 1,700 workers. Union members are said to be in talks with Ford management to discuss possible redeployment of workers to other facilities.
The plant closure will have serious ramifications for suppliers, both in Wales and the UK. There are a series of plastics companies in the direct area of the plant, including various thermoformers.
The move is a further blow to the UK car industry, which has suffered a series of setbacks since the Brexit referendum.
In February, Honda announced that it would close its Swindon plant in 2021, when production of the current Civic comes to a close. The shutdown will result in 3,500 job losses.
JLR, the largest carmaker operating in the UK, has further announced that it plans to cut a series of jobs, largely due to a slump in the China car market. While Nissan has confirmed the next Qashqai crossover SUV will be built in Sunderland, the company elected not to add the X-Trail SUV to production.
Total finished vehicle output across the UK has fallen by about 400,000 units between April 2017 and '19 (1,76m to 1.39m units).
The Bridgend plant was thought to be under threat of closure as a contract to produce engines for JLR, which dates back to when the now TATA-owned company was part of Ford, was due to expire this year. Investment in Ford's new 'Dragon' petrol engine has also been scaled back.
Ford Motor had already announced that it is planning to implement a series of cost-cutting programmes around the world, which would result in about 7,000 job losses, 10% of its global workforce.
Ford operates two other plants in the UK, the diesel engine plant in Dagenham, east London, and a transmission plant in Halewood, near Liverpool.
The Bridgend plant was set up originally to produce engines for the Ford Escort. Since then, the plant has gone on to deliver engines for assembly of various models across Europe.