More than 260 staff at the Driver and Vehicle Licensing Office in Coleraine face an uncertain future.
The government says it hopes most of the staff can be redeployed
The DVLNI office deals with car tax applications for the whole of Northern Ireland, but in autumn next year, this work will be centralised in Swansea.
The government says it hopes most of the staff can be redeployed across different areas of the civil service.
A Department of the Environment spokesperson said the changes would mean better services for motorists.
The department said 90 staff could be moved to a different type of work which the DVLNI will begin handling at the same time.
The DoE hopes that the remaining 103 permanent staff could be cut through redeployment across the civil service or retirement, but the fate of another 68 temporary employees is less clear.
Derek Smyth from the Nipsa union said staff were very upset.
"Staff here are shocked that so many posts could be on the line," he said.
"To come back in the new year and to be told that your work is going over to the mainland has come as a shock.
"To be honest, it is even too early yet for staff to be angry, they are going to have to go home and discuss it with their families."
Politicians, including East Londonderry MP Gregory Campbell and East Derry SDLP Assembly member John Dallat said the government must give the workers assurances.