Security guards have been brought in to oversee the process, and workers are being ferried from the carmaking plant to a reception centre across the road to be told the news.
Australian Manufacturing Workers Union official Charlie Marmara says 262 workers will be sacked over two days and 88 had accepted voluntary redundancies.
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He says the tactics employed by Toyota, including calling in security guards and transporting workers across the road in vans, are heavy handed.
About 80 per cent will appeal the decision to make them redundant.
Unions have attacked the company for failing to identify which workers would face the axe since it announced the redundancies 13 weeks ago.
Workers were learning of their fate individually in a staggered approach during morning and afternoon shifts on Monday and Tuesday, Toyota spokeswoman Beck Angel said on Monday.
"Management want to have one on one meetings with everyone, so that will be happening on a shop by shop basis," she added.
Ms Angel defended the company's decision to hire additional security guards at the plant over the two days, saying extra security was "quite normal for a redundancy process".
Toyota has blamed the high Australian dollar and a resultant loss of exports for the job cuts.
Axed worker Charles Allen, 41, who was among the first to go at the plant, said he was devastated to have lost his job after 18 years on the engine manufacturing line.
"I've been coming here for 18 years and that's all I know, so now I've got to look for something else," the Werribee man told Fairfax radio on Monday.
Mr Allen said he dreaded driving home and telling his wife the grim news, but hoped his redundancy package would help the couple pay off their mortgage while he looked for a new job.
Opposition Leader Daniel Andrews said the Victorian government should ensure the May budget includes a plan to deal with the jobs crisis.
"The premier needs to come out from under his desk today and explain to those 350 Toyota workers and to the rest of Victoria what he's going to do to keep Victorians in work," he told reporters.
Mr Andrews said the government should commit to giving sacked Toyota workers the retraining and transition assistance they will need.
