More than 50 jobs are at risk at ITV's factual programme department in Bristol which produces television programmes for the ITV network and Channel 4.
ITV said the closure was "a commercial decision"
An ITV spokesman said the unit's work would be completed by the end of 2006 and it had no further commissions.
"This decision reflects the competitive production environment and is not a reflection on the quality of the unit's work over many years," he said.
The company said every effort would be made to redeploy or relocate staff.
Granada - which has a base in Clifton, Bristol - is part of ITV Productions which makes programmes for the BBC, Channel 4, Five, Sky One and a number of other satellite and digital channels.
A spokesman for the broadcasting union Bectu said: "This is a sad day for the people at Granada whose jobs are on the line and it's a sad day for TV production in Bristol. "The cutbacks at Granada's Factual department seem to be symptomatic of a dumbing down and waning of commitment to factual programmes in the industry.
"We obviously hope that a buyer can be found but, if one isn't found, Bectu will be supporting its members at Granada to protect jobs and ensure that people are treated fairly," he said.
ITV Productions said it currently made factual programmes from five sites in the UK, which had led to an issue of overcapacity
"As a commercial company we have to make commercial decisions," the ITV spokesman added.