THE University of Tasmania is building student accommodation at Inveresk because it "is what the Launceston City Council and the community want", according to chief operating officer David Clerk.
The council decided on Monday to transfer to the university for minimal cost a large parcel of land at Inveresk, on which it plans to build an $18 million, four-storey apartment block containing 120 student accommodation units.
"Following a UTAS decision in late 2011 to build additional student accommodation in Launceston, UTAS was approached by council representatives to build on the Inveresk site in a bid to increase the vibrancy of the CBD and support the Inner City Action Plan," Mr Clerk said.
"The original proposal was for a larger footprint. However, after conversations with the council, UTAS decided to reduce the footprint and build upwards.
"This will provide the council with additional development opportunities on the riverfront."
The decision will also give the university ownership of the Stone Building and Exhibition Building, which already houses the school of visual and performing art and school of architecture and design.
As part of the deal, the university will contribute $500,000 towards a concrete flood levee on the North Esk River.
Mr Clerk said the Inveresk site was the best in the city to help attract more students to Launceston.
"The cost of construction is high relative to other student accommodation sites being considered or under development," he said.
"This is mainly a reflection of the additional cost associated with adhering to building code requirements for a flood zone."