The news follows City Forests' decision in April to progressively downsize the plant and have it closed by September, a move which would have cost the jobs of all employees based there.
City Forests chief executive Grant Dodson said the company had leased the mill to Craigpine Timber Ltd of Winton, effective from the start of this month.
He said some employees had retained their jobs through the changeover, but he could not say how many.
"It's a positive outcome for City Forests, Craigpine, and for a number of employees there at the mill."
Mr Dodson declined to reveal the length of the lease, other than that it was for "a number of years".
In April, Mr Dodson said City Forests, a Dunedin City Council-owned company, established the plant in 2006, at an estimated cost of $15 million, primarily to supply the US housing market, but construction activity there had since dropped from 2 million homes a year to about 600,000.
The Otago Daily Times asked Craigpine Timber Ltd how many jobs would be saved by the handover and why the company took on the lease when City Forests found the plant was no long viable.
The company's general manager, John Price, declined to comment, stating while it was good news, the firm had a policy of not commenting to media.
Clutha Mayor Bryan Cadogan could not be contacted last night.
