The deal would see the state government redirect money it would have spent on debt repayments into programs that increase social housing, reduce homelessness and improve housing supply.

It follows months of speculation after Tasmanian senator Jacqui Lambie named the debt a condition of her support for the federal government's income tax cuts - with news of the impending deal breaking on Friday.

But the ministers were keen to note the result was a team effort.

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"For decades, Tasmanian governments and social housing sector advocates have been raising this issue of Tasmania's historic housing debt and asking for it to be relieved," state Housing Minister Roger Jaensch told media.

"We've been able to secure an arrangement that ensures that despite what some have been speculating there is no clawback of this saving."

Federal Housing Minister and assistant treasurer Michael Sukkar issued the same the assurances in praising the "unprecedented" deal.

"The agreement stipulates that the amount that's been forgiven cannot in any way ... offset other grants that would otherwise be paid to Tasmania and cannot offset any GST revenue," Mr Sukkar said. "So this is an additional amount of money."

The text of the agreement notes any exclusion of the debt amount from GST calculations would be conditional on written agreement between the state and federal treasurers. The state government is also required to report annually on key actions and outcomes.

Mr Sukkar said other states and territories would be "silly not to" look at the deal closely - with the federal government open to "consider anything" on a case by case basis - but added Tasmania had met a "very, very high bar" to strike it.

He also waived off labour shortage concerns associated with construction work under the state government's affordable housing plan - which Mr Jaensch estimated would be boosted by 80 dwellings each year with money freed up by the deal.

Tasmanian Council of Social Service chief executive Kym Goodes said the agreement showed what could happen when the state's voice unites on "an issue that matters to us all".

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She said it was an "important turning point" for Tasmania's ability to provide homes to those who need them and reverse more than 14 years of under investment in public housing.

But Tasmanian Greens leader and housing spokesperson Cassy O'Connor warned the debt agreement should not be seen as a silver bullet for the state's housing issues either.

"Lifting the housing debt is hugely positive, but Minister Jaensch must know there's a lot more funding required and work to do to tackle the housing crisis," she said.

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