THE state government is confident of federal funding for a proposed $210 million Perth bypass.
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The Northern Midlands Council is strongly supporting the renewed push.
The development, mooted more than a decade ago, would bypass North and South Perth in an attempt to streamline road freight and increase amenity for town residents.
Infrastructure Minister David O'Byrne said the department made a strong submission to the federal government's Nation Building 2 Program.
"The Midland Highway through Perth is a single carriageway, and not particularly efficient for its heavy amount of freight traffic," Mr O'Byrne said.
"The proposed bypass would reduce travel times, and significantly reduce the number of heavy vehicles travelling through Perth. That improves safety, and helps support Tasmanian industry and jobs.
"We're confident the federal government understands the immense economic potential of the projects we're seeking."
Northern Midlands Mayor Kim Polley said allowances had been made for the development in the council's planning scheme.
"We've supported it because it's what the community wanted," Cr Polley said.
"The land has been preserved and earmarked for a bypass.
"It's a very big project ... there's an awful lot of money to be spent, we're sitting here waiting and would welcome it."
A bypass from the Perth bridge to Illawarra Road, including two exits to Perth, and duplication of the existing highway from Perth to Breadalbane are included in the plan.
Northern Midlands general manager Adam Wilson said the bypass development was a priority for the council, and could see Perth expand in residential lots.
"You could strengthen the residential area of Perth, which is probably one of our fastest growing towns within the municipality," Mr Wilson said.
"It would provide more residential harmony, while allowing quicker movements of large traffic."