Staff will stay until the end of February to process applications, but the office will be closed to the public from next Wednesday.
The closure was announced in January last year, but had taken longer than expected, Immigration New Zealand area manager Michael Carley said.
Four people were made redundant, and a fifth accepted a position in INZ's Christchurch office.
The Dunedin office had had six staff, but an immigration officer transferred to Auckland after the closure decision.
Since then that position had been filled by short-term contracts.
All South Island visa applications would be processed in Christchurch.
The new system would be simpler and easier, Mr Carley said.
Immigration Minister Michael Woodhouse, a Dunedin-based list MP, accused Labour's Dr David Clark of crying ''crocodile tears'' about the closure.
In an opinion piece yesterday, Dunedin North MP Dr Clark said the closure was typical of the Government's ''thoughtless centralisation''.
It removed much-needed middle-income jobs from Dunedin, and there was no credible business case for the move.
''It's far from transparent, and I think one has reason to be a bit cynical, given the fact that they postponed it in election year. It's been on the books for a while and there's relatively little consultation or public profile,'' Dr Clark told the Otago Daily Times in an interview.
Mr Woodhouse pointed out that Labour started centralising visa processing when it was in office.
''So, Dr Clark should dry his crocodile tears and ask his colleagues why they were in favour of centralising services during their last term in government.
''Dr Clark's claim that there has not been an adequate consultation process is absolutely incorrect. A comprehensive consultation process on the closure of the Dunedin office as part of INZ's new service delivery model began in 2012,'' Mr Woodhouse said.
