The Moy Park plant in Bury St Edmunds will close with production being moved to a company site in Lincolnshire.
A total of almost 200 staff could lose their jobs as a result, although efforts are being made to offer relocation packages.
A company spokesman said that the recent sharp increase in the price of wheat, a staple of chicken feed, had reduced the economic viability of the plant.
The spokesman continued: "The Bury site came under Moy Park's ownership in 2004 and had the market been stronger for whole, locally reared chicken then our decision might have been different.
"However the main growth sector for chicken sales is swayed in favour more for portions than whole birds and Moy Park has invested close to £30m in our other far larger facility in Lincolnshire."