Mr Ferguson was at the Launceston General Hospital on Monday morning to discuss the new Healthy Tasmania Fund grants with local government representatives, interest groups and health organisations.

In the 2019-20 state budget, $1.4 million was allocated this financial year to a program for community organisations looking to invest in improving the health and wellbeing of their communities. In previous years, the grants funding had been limited to $500,000.

The minister said this new funding was in addition to the previous community grants, which are set to continue.

"We are seeing an opportunity, as a government, to partner with local communities," Mr Ferguson said.

"We want to partner at the grassroots and reach people where they live."

The announcement comes after a report from the state Health Department last week showed the number of overweight and obese Tasmanian adults had increased from 54 per cent of the population in 2009 to 60 per cent in 2016.

Two weeks ago, research from Victoria University's Mitchell Institute revealed Bridgewater and Gagebrook in the South had the worst smoking rates in Australia.

"We've got to be willing to be challenged by the bad statistics but also not to be despondent about it otherwise people won't feel empowered to do something about it," Mr Ferguson said.

The Healthy Tasmania Fund's focus will be on reducing smoking, obesity and the number of overweight Tasmanians, as well as improving healthy eating habits and physical activity levels.

Grants of up to $200,000 will be available for projects or initiatives that last up to two years.

Applications are set to open on July 1 and close in late August.