A BOLD $225 million plan by the University of Tasmania to develop a new campus at Inveresk will require federal funding and the ability to offer unlimited associate degrees.

Provost Mike Calford presented the project to a Senate inquiry hearing in Launceston this week, which is looking for better ways to fund large projects in regional cities.

The project could see a teaching hub built next to Aurora Stadium and a second building built at Willis Street for research, and would aim to attract 10,000 extra students, two-thirds of whom would study associate degrees.

Bass Liberal MHR Andrew Nikolic said he would be working with his federal Liberal colleagues to present the proposal to the new education minister Simon Birmingham once detailed costings and a business case were revealed and public consultation had occurred.

He said the state was in a fortunate position in having Tasmanian senator Richard Colbeck as International Education Minister, who had a key stake in policy issues.

Professor Calford said UTAS needed federal government support for the project to proceed and was confident funding would be sought.

He said the university had the capacity to fund part of the project, but would not reveal a figure at this stage, and that details had been provided to the Joint Commonwealth and Tasmanian Economic Council for consideration.

"We have a very good plan and we think it is one that will excite our politicians," he said.

"There are some realities here ... universities don't have great capacity to build their own buildings, we need government support for that.

"If we were to approach government to spend a few hundred million dollars at Newnham, we wouldn't be very successful.

"It is the win-win situation of bringing added vitality to the community and CBD and boosting other ancillary businesses, who will benefit from our presence close to the CBD [that would help attract funding]."

Tasmanian Greens senator Peter Whish-Wilson said he would be doing everything he could to find federal funding for the project, provided there was business and community backing.

Bass Labor candidate Ross Hart said the university proposal funding issue would be raised during a meeting with shadow finance minister Tony Burke in Launceston next week.

He said he was excited by the proposal, but stressed the need for a long-term commitment to research and a full range of faculties in the North.

A public consultation session about the project will be held on October 1 from 5.30pm at the Albert Hall in Launceston.

LAUNCESTON mayor Albert van Zetten said the Launceston Show Society would need to relocate should the university's move to Inveresk take place.

"Newnham would certainly be one of those locations and they are looking at other locations," he said.

"The future of the show depends very much on getting their own site that is suitable for the show and the current site is not their most ideal site."

He said now was an opportune time for them to do so.

THE University of Tasmania would work with the Launceston City of Council to ensure no negative social impacts are felt by the city's Northern suburbs.

A working group would be formed to decide how best to redevelop the Newnham sites as part of the Northern Suburbs Revitalisation strategy.

University provost Mike Calford said some of the university's top academics - such as sociologists, social workers and geographers - would assist with the process.

"The Launceston City Council will be running a process around that impact and we're contributing to that impact, we don't want to see any social problems created by our move," he said. "We're looking to expand the Australian Maritime College, we are looking for businesses to take a place around the maritime college - those interested in using our facilities and buddying off that activity. We see it as being a vibrant area."

Launceston mayor Albert van Zetten said the project was important for greater Launceston.

"We did a survey at council, a study looking back at what's happened from 2006 to 2011 ... and it showed that wages in the region of Launceston dropped by $99 million in that period. It also showed the gross revenue dropped by $140 million," he said.

"It shows you that the lack of forestry and manufacturing in that time has had a significant impact on Launceston.

"So what Launceston does need is a new injection of some sort of capital and new capital to create jobs."

MOWBRAY businesses are not too concerned about the perceived drop in trade that could happen should the University of Tasmania move from Newnham to Inveresk.

SportFirst owner Darren Harper said it would be naive to think it would have no impact.

However, he said that a majority of his customers were from the Australian Maritime College, which would remain at Newnham.

"Obviously it is going to hurt us a little bit because they do come through, and we give the university students a 10 per cent discount, but what we find is that we tend to have more of the AMC guys come in," Mr Harper said.

"The human movement side have got to get sandshoes and stuff ... Invermay is not that far away from Mowbray.

"Invermay is not geared up to take the accommodation needed as well, while everything around Mowbray was geared up for it."

Other business owners said it would be good and perhaps reduce traffic congestion along Invermay Road at Mowbray, and that mainly university staff were frequent customers.

They said northern suburbs residents would still continue to "live in the northern suburbs".

Launceston Chamber of Commerce chief executive Maree Tetlow said the plans painted a bright picture for the city's future.

She hoped the broader community would get behind the project.

"Obviously there a lot of questions in the community ... I think there has been a lot of questions asked and a lot of uncertainly with the development of the concept in the past few months, and people just not understanding the need for change," Ms Tetlow said.

"Of course the construction is important and the relocation of the university, but it also the new business model."

THE University of Tasmania has had a traffic consultant look into the possible traffic implications on Inveresk and would work with the Launceston City Council on ways to mitigate concerns expressed by the community of heightened congestion.

University provost Mike Calford said there would be more parking at the Willis Street and Inveresk sites than what was available at Newnham.

"Working on both sides of the river improves that traffic flow and we're confident any individual difficulties can be sorted out," he said.

The university website says: "the university has a strong commitment to sustainability and, by locating the campus closer to the city, sees the opportunity to leverage the existing public transport options to lessen the reliance on car transport.

"By expanding the presence at Inveresk, there is also the opportunity to better use the new bike and pedestrian access pathway infrastructure."

Car parking at the sites will be available to the public on weekends and during holiday periods.

Launceston Chamber of Commerce chief executive Maree Tetlow said: "I know people will have issues around parking and traffic flow, and of course positive changes always mean those things need to be looked at".