Direct flights between Hobart and Adelaide will start later this year.
The Jetstar service will operate three times a week with a capacity of 56,000 seats.
Premier Will Hodgman said the two-hour flights could help attract an estimated 46,000 visitors from South Australia each year, and link more international visitors to the state.
Five-per-cent of all interstate visitors to Tasmania come from South Australia.
Tourism Tasmania will soon launched a marketing campaign targeted at the state.