The Youth Castles pilot project will trial five self-contained, demountable and moveable micro-homes that would provide a short-term housing option for young people before transitioning into a permanent dwelling.

Government branch Housing Connect will choose youths profiled to benefit from the program and implement support workers to monitor their progress.

Human Services Minister Jacquie Petrusma said the mobility of the micro-homes meant they could be set up in places that would allow the occupants to remain close to support networks.

"Often, these are young people who for various reasons have chosen not to live at home with their family," Ms Petrusma said.

"They might be wary about living by themselves in a proper house, so this way they've got the safety of being in a backyard where they feel more comfortable."

Each micro-home will have photovoltaic solar energy, a composting toilet, and LPG cooking and hot water.

The project is the result of a partnership between the University of Tasmania's School of Architecture and the Launceston-based not-for-profit Youth Futures and will involve Work for the Dole participants, who will gain construction and manufacturing skills.