"The Dilston bypass corridor was acquired solely for road purposes," Mr Bartlett said.

"Provided the location of the pipeline within the bypass corridor complies with the applicable requirements of the pulp mill permit issued under the Pulp Mill Assessment Act, then the pulp mill proponents have a legal entitlement to adopt this alignment."

Mr Bartlett said the department had asked the proponent to demonstrate that the pipeline location complied with the requirements of the pulp mill permit and that the department would also seek to ensure that the pipeline proposal had minimal impact on future stages of road construction in the bypass corridor, if it goes ahead.

Some of the land acquired by the government for the highway includes land farmers had previously refused to sell to Gunns for the pipeline to its $2.2 billion Tamar Valley pulp mill.

Tasmanian Greens forests spokesman Kim Booth accused the government of using the Dilston bypass as a "Trojan horse" to acquire private land on behalf of the company.

Mr Bartlett said Mr Booth was playing "old-style politics" - a claim Mr Booth rejected.

"It was David Bartlett who claimed to have drawn a line in the sand, it was Bartlett who claimed that there would be no further assistance for Gunns, and now that he has been caught out deceiving Tasmanians by seizing private property for Gunns Ltd, he cries foul," Mr Booth said.