GSI Group Announces Sale of California-based Optics Business

BEDFORD, MA July 3, 2008: GSI Group Inc., (Nasdaq: GSIG), a supplier of
precision technology and semiconductor systems, today announced that it has
entered into a definitive agreement to sell its General Optics business unit
located in Moorpark, California to Gooch & Housego plc. for $21 Million. General
Optics (Moorpark) manufactures super-polished glass and optics for the
telecommunications, scientific and defense industries. The sale is expected to
close on or before the end of GSI's third quarter, subject to regulatory
approval. GSI Group's Taunton UK-based beryllium and beryllium optics business
is not included in the transaction.

Dr. Sergio Edelstein, CEO of GSI Group said "This decision is another step in
our strategy to focus on our core strategic technologies - lasers and precision
motion. The move will enable our Company to concentrate our efforts in our main
growth areas."

About GSI Group Inc.

GSI Group Inc. supplies precision technology to the global medical, electronics,
and industrial markets and semiconductor systems. GSI Group Inc.'s common shares
are listed on Nasdaq (GSIG). Certain statements in this news release may
constitute forward-looking statements within the meaning of the United States
Private Securities Litigation Reform Act of 1995, Section 27A of the United
States Securities Act of 1933 and Section 21E of the United States Securities
Exchange Act of 1934. These forward-looking statements may relate to anticipated
financial performance, management's plans and objectives for future operations,
business prospects, outcome of regulatory proceedings, market conditions, tax
issues and other matters. All statements contained in this news release that do
not relate to matters of historical fact should be considered forward-looking
statements, and are generally identified by words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "objective" and other similar
expressions. Readers should not place undue reliance on the forward- looking
statements contained in this news release. Such statements are based on
management's beliefs and assumptions and on information currently available to
management and are subject to risks, uncertainties and changes in condition,
significance, value and effect. Other risks include the fact that the Company's
sales have been and are expected to continue to be dependent upon customer
capital equipment expenditures, which are, in turn, affected by business cycles
in the markets served by those customers. Other factors include volatility in
the semiconductor industry, the risk of order delays and cancellations, the risk
of delays by customers in introducing their new products and market acceptance
of products incorporating subsystems supplied by the Company, risks of currency
fluctuations, risks to the Company of delays in its new products, our ability to
continue to reduce costs and capital expenditures, our ability to focus R&D
investment and integrate acquisitions, changes in applicable accounting
standards, tax regulations or other external regulatory rules and standards, and
other risks detailed in reports and documents filed by the Company with the
United States Securities and Exchange Commission and with securities regulatory
authorities in Canada. Such risks, uncertainties and changes in condition,
significance, value and effect, many of which are beyond the Company's control,
could cause the Company's actual results and other future events to differ
materially from those anticipated. The Company does not, however, assume any
obligation to update these forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting such
forward-looking statements. For more information contact: Investor Relations,
781-266-5873