The three local BI-LO warehouses will close effective June 15, workers were notified on Monday.
BI-LO operates out of a warehouse on Shallowford Road at Highway 153 and two warehouses on Polymer Drive.
Officials said BI-LO stores here will be served in the future out of the company headquarters in Mauldin, S.C., just outside of Greenville.
When BI-LO was acquired by Lone Star Funds in 2004, the local warehouse operation was spun off to C&S Transportation.
At one time, the local warehouses served the Knoxville and Middle Tennessee areas.
Recently, the warehouses here have served the Chattanooga area and portions of North Georgia.
Employees were told they will receive severance packages and job training. They may also be eligible for other positions with C&S if they choose to relocate.
It was announced last week that the BI-LO grocery chain is uip for sale by owner Lone Star Funds.
BI-LO has 230 stores in the Carolinas, Georgia and Tennessee, including 35 in the Chattanooga area.
Lone Star said it has retained Merrill Lynch & Company as its lead financial adviser and William Blair & Company as the co-adviser to evaluate the sale.
Lone Star, which is based in Dallas, Tex., acquired BI-LO from the Ahold firm in 2004.
It bought BI-LO and Bruno's for total cash proceeds of up to $660 million.
Lone Star Funds manages more than $13 billion in assets and investments in North America, Europe and Asia.
Ahold, which is based in The Netherlands, acquired BI-LO in 1977.
BI-LO announced recently it was closing the Lookout Valley store, which is on Cummings Highway near a new Super Wal-Mart.