Paul Steele, Tata Steel's managing director for distribution UK and Ireland, said: "It is with great regret that, following a detailed review of the TSCP business, we have proposed to cease operations at construction products.
“Most reluctantly, we have come to the conclusion that there are no prospects of generating sufficient viable new business to sustain this operation.
"Clearly this is a very difficult time for the people who work for the business and I would like to pay tribute to everyone who has tried so hard to enable this business, which has operated at a consistent loss since 2008, to overcome the continuing economic downturn."
Steele said the company had twice recently restructured "to focus on new and developing markets," but to no avail.
Tata will also halt production for a week at its Trostre tinplate works in Llanelli.
More than 700 people are employed at Trostre but Tata said the break in production in October would not lead to any job losses.
The union Community said it was another case of a good business closing because of the state of the economy.
The molten steel production section at Llanwern closed with the loss of 1,300 jobs in July 2001.
Tata employs about 7,500 staff in Wales, with about 1,400 at Llanwern.