It is anticipated that production at the Switzerland-based mill will cease at the end of July, while the company investigates possibilities for a sale and alternative industrial use of the site.
Mat Quaedvlieg, director of manufacturing at SFPE, said the reason for the closure of the mill was mainly the costs that had risen, which he said had been "sky high".
He said: "Energy costs at the mill are very expensive, and there is also overcapacity in the whole marketplace."
Staff at the mill have been invited to apply at Sappi mills elsewhere, but Quaedvlieg said that the company did not have 550 jobs available.
A decision concerning the remaining employees will be made by the end of July.
"The main focus now is to try everything possible to sell the site, so that it continues production," he added.
Berry Wiersum, CEO of Sappi Fine Paper Europe, said: "We recognise this is a very difficult and unfortunate outcome for those employees concerned, their families and the communities surrounding the mill.
"Unfortunately this action was unavoidable and essential given the continued overcapacity and sustained increases in input costs."
Volumes produced at the mill will be transferred to other Sappi sites. Production of the uncoated Cento brand will continue if a suitable new owner for the mill is found by the end of July.
There will be no supply interruption of coated paper to customers during the transfer of production.
However, an industry insider said: "I thought Sappi was protecting its market share, manufacturing sites and jobs in Europe, by participating in the dumping and subsidy case against China with CEPI.
"But no sooner than they win the case do they announce the closure of the 500,000 tonne mill at Biberist. So now we are probably looking at two prices hikes as the market adjusts."
Quaedvlieg said the decision to close the Biberist mill "had nothing to do" with the anti-dumping issue. "It is an independent matter," he added.
The company announced in April this year that it was looking to close the Biberist mill.
