Employees have agreed to a host of changes that chief executive Barry Hibbert said enabled the company to continue running the factory.
Polestar announced plans to close the plant in January due to a negative outlook for the sector. As well as union negotiations, local MP sir Bob Russell also urged the company to rethink the closure.
Hibbert told PrintWeek that employees have agreed to move from a 35-hour week to 39 hours and will take a basic rate reduction, with an average of 10%.
Other changes include moving to flat rate overtime without premium, which Hibbert said would help manage peaks and troughs in the workload, and a "slight" reduction in holiday entitlement.
As well as this, there have been 11 voluntary redundancies and a reduction in some consumable costs.
When combined, Polestar believes it will reduce its cost base by around £1.7m annually, with implementation taking place over the next few months.
Hibbert said: "The dynamics for a B2B printer with falling demand, migration to online of smaller titles combined with material cost increasing meant the crossover to-loss making occurred some time ago.
"It was expected that closure was the most likely outcome. However, a concentrated effort by employees, unions, the local MP, suppliers and customers delivered a new cost base that presented a viable alternative to closure. We are, of course, delighted that these jobs remain viable for the future."
Hibbert wrote to Russell to confirm the change, he said: "I would personally like to thank you for your intervention with Polestar management, union officials and employees. I have to say that a sensible position was taken by everyone, ensuring Polestar Colchester has a viable future."
Unite national officer Steve Sibbald added: "In a unique situation such as this, where we have an economic crisis and huge over-capacity in the sector, the chapel reluctantly agreed to the change in terms and conditions.
"It is important to remember that these changes were negotiated, not imposed, and we reserve the right negotiate the terms and conditions back again when the economy and the sector are in a healthier position."
