NZ Post and Kiwibank spokeswoman Holly Thompson said the move would result in redundancies but could not confirm details or timeframes.
"There will be redundancies, but those issues are still being discussed directly with the staff so I don't want to go into any further detail."
Five staff work at the Alexandra branch on full time and on-call roles.
The statement said the move was being done because of "the changing needs of NZ Post and Kiwibank customers and the services they utilise in branches".
A franchise partner will be sought "to deliver postal services and transactional banking services on our behalf".
Ms Thomson said it was not known when the franchise partner would be announced.
"We don't know the answer to this yet, as we are just beginning the search for a franchise partner now. We will keep the community informed as soon as any more specific information is known."
The move follows the decision last month to close the NZ Post shop in Queenstown, open a new Kiwibank branch and have postal services supplied by a business partner.
New Kiwibank ATM machines have recently been installed in both Queenstown and Alexandra.
