Victoria CFA (Country Fire Authority) arrived at the scene at 8.10pm and said the plant has now been given the all-clear.
All staff were evacuated from the building and two workers were taken to hospital with minor symptoms.
CFA warned residents near the processing facility to stay indoors and close all exterior doors, windows and vents “due to a hazardous gas leak” on their Facebook page.
Cobden CFA captain Bill Nelson said the incident happened at about 8pm, with crews in attendance until about 11.30pm.
He said units from Cobden, Camperdown, Bostocks Creek and HAZMAT Warrnambool attended the scene.
“It (the incident) was an ammonia leak inside the butter room caused by a mechanical fault,” said Nelson.
“Staff were evacuated at the site.”
Crews from Victoria police and ambulance were also on the scene.