The dairy giant says if the policy's introduced, all roles across all New Zealand sites would need to be performed by a vaccinated person, from March 1.
Dairy farmers aren't classed as employees so the policy wouldn't apply to them.
Fonterra says a decision will be made in the New Year.
The company says it aims to keep as many people employed as possible, but anyone who can't continue will be paid at least four weeks' notice.
Fonterra says Covid-19 remains a risk to vaccinated and unvaccinated people in its workplaces and vaccination is the best tool to protect people.