The $1.5 million project will see a bar and restaurant plus other commercial space fitted out in Launceston's old gasworks opposite City Park.

The bar will be located in the bottom floor of what is known as the vertical retort building, emblazoned with the ever recognisable Cook with Gas advertising sign across its top.

The structure was responsible for producing gas and coke from 1932 until its decommissioning in 1978.

Plenty of industrial machinery still survives within the building, leaving architectural firm ARTAS to incorporate it into the development.

This includes large bunkers which fed coal in to the still-present retorts - essentially large kiln ovens - which extracted the gas and sent the resulting coke in to large metal chutes that dumped the coke on to a conveyer belt.

The conveyer belt will be covered over with toughened glass and embedded in the floor of the bar.

``We understand it's one of the very few vertical retort buildings still left standing in Australia and we've been working fairly closely with the (Tasmanian) Heritage Council to adapt this building to new use,'' ARTAS project manager Scott Curran said.

``We are looking to keep the industrial nature of the building.''

This means keeping as much of the existing structure and brickwork as possible and linking it to another building with a glass infill. The four-storey glass atrium will form the restaurant while the carbureted water gas building it links to will host the kitchen and a commercial space.

The plan is for the upper floors of the vertical retort building to also be used for future development. Mr Curran said the project was in an ideal part of Launceston located between the York Park precinct and City Park next to the North Esk River.

It is also opposite the Willis Street car park which the Launceston City Council is developing a master plan for.

``It's quite an important position for the future for Launceston,'' he said.

``We're not only excited about the building but also turning the gasworks into a tourist and recreational precinct.''

The council approved the project on Monday.