However, the union wants a guarantee on jobs.

The Prime Minister and Federal Education Minister have dismissed reports that UTAS will have its base funding cut 11.4 per cent or $177 million.

UTAS Vice-Chancellor Professor Rufus Black said he was “comfortable” with the funding being provided.

"Our University community has been thinking deeply about the idea of scale and the view that has emerged from those conversations is that we need to be right-sized, but responsive to current and future needs,” Professor Black said.

"On that basis, we are comfortable we have the funding we need for the next two years to provide educational opportunities for Tasmania and serve the needs of the State.

"If other demand or opportunity arises into the future we will make our case for those at that time."

However, National Tertiary Education Union Tasmanian secretary Kelvin Michael said he was worried there could be job losses.

Dr Michael said he believed UTAS would receive significantly less funding than previously expected because of the Federal Government’s “short-sighted decision to cap funding at the current levels.”

“While it is heartening to hear the Vice-Chancellor say that UTAS can continue to provide education to the State, our NTEU members are worried that a reduction in funding in real terms may lead to reductions in the workforce, particularly if any job losses occur at regional campuses,” Dr Michael said.

“Under these circumstances, we call on the Vice-Chancellor to make clear commitments about maintaining jobs for the many Tasmanians working at UTAS.

“Other possible consequences of reduced funding are to erode the quality of the UTAS educational experience and/or to turn away Tasmanian year 12 students hoping to study a course at UTAS.”.

Prime Minister Malcolm Turnbull said his government was putting an extra $150 million into UTAS with the relocation in Launceston.

“In terms of the funding, there will be an additional billion dollars going into universities over the next four years from the Federal Government,” Mr Turnbull said.

“You've got to remember that what we've seen over recent years is that universities’ revenues from the Federal Government have been increasing much more rapidly, by about 15 per cent, than the cost of teaching, about nine per cent.

“So, the universities have been putting a lot of money away into other things; into salaries, into administration, into marketing. So, what we're saying is, the universities should take very substantial surplus they’ve been running at and putting it into supporting students and teaching.”

Education Minister Simon Birmingham said it was wrong to say there had been a funding cut.

“In the case of the University of Tasmania base funding will grow by $42.5 million over the next four years in addition to the growth in funding for research and special payments to support regional students,” Senator Birmingham said.

“The Turnbull Government has also committed $150 million for UTAS’ Northern Transformation Program and an additional $41 million to support additional student places.”

Denison Independent MP Andrew Wilkie said the funding freeze would have a significant impact.

“UTAS and other regional universities will be hit particularly hard because they have less financial flexibility than universities in big cities and a higher reliance on Commonwealth payments,” Mr Wilkie said.

“UTAS also has a higher student turnover and relatively costly campuses to maintain

“Moreover UTAS is one of the biggest economic drivers in Tasmania and so any funding cut will have flow-on effects for the rest of the state.

“It’s self-evident that any funding cut will reduce the number of courses that can be delivered and the quality of those courses.”

Labor candidate for Braddon Justine Keay said the cuts mean fewer bachelor degree places so many North West Tasmanians would miss out.

“Labor has committed to reversing Mr Turnbull’s unfair uni cap policy,” Ms Keay said.

“Under Labor, around 618 extra people in Braddon will get the chance to study a bachelor degree at uni.”