Launceston Chamber of Commerce executive officer Neil Grose said the move was the right one for TasTAFE because Alanvale afforded more room to expand than the city campus on Paterson Street.

However, Mr Grose said the move should provide the catalyst for an important discussion about vocational education, not only in Launceston but in Tasmania amid revelations of course delays and staff resignations.

It was revealed, under right to information documents on Monday, TasTAFE had lost 10 long-term staff members amid a year that had been marred by unexpected teacher resignations and course cancellations that were affecting students' future financial stability.

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Education Minister Jeremy Rockliff revealed on Tuesday the Alanvale campus would undergo a $4 million refurbishment, but Opposition skills spokeswoman Michelle O'Byrne called on the government to reverse the closure decision.

"There are extensive problems with the current infrastructure at the Alanvale campus which will need considerable investment to bring it up to standard and there's a genuine risk that course offerings will be reduced," she said.

Mr Rockliff and Premier Will Hodgman dismissed the concerns as 'fear mongering' and said the city campus was no longer fit for purpose.

Mr Rockliff said TasTAFE's Alanvale campus would undergo a $4 million upgrade "to improve learning opportunities for our students."

The refurbishment is expected to include extensive classroom refurbishments, new student amenities, upgraded library facilities and new fit-for-purpose practical rooms for nursing.

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"This move will centralise TasTAFE's Northern offerings in one refurbished modern campus and will deliver significant cost savings to be reinvested into facilities and equipment," he said.

"As hard as they try the Opposition can't re-write history, Tasmanians remember all too well the millions of dollars in debt the Labor-Green Government left TasTAFE in, and how they lost 4000 apprentices through their disastrous Tasmanian Tomorrow reforms."

Funding issues at TasTAFE were also raised in Parliament, with Michelle O'Byrne directing questions about funding to Premier Will Hodgman.

However, Mr Hodgman backed the decision to move TasTAFE from the Launceston CBD to Alanvale and reiterated the state government had increased funding to TasTAFE.

"Since 2015 we have increased recurrent funding to TasTAFE from $73.5 million to $76.5 million in the 2018-19 financial year, which represents around 80 per cent of the state's training budget," Mr Hodgman said.

"The Launceston city campus is underutilised and the outdated classrooms require significant expenditure to upgrade," he said.

The changes to Launceston will not affect Drysdale North, which will continue to operate from the Paterson Street site.

Mr Grose said the relocation of TasTAFE would open up a significant development opportunity in the vacant building and likened it to the Paterson Barracks.

"We need great entrepreneurial minds to get together to think about how to drive this city forward for the intelligent use of this building," he said.

Mr Rockliff said the state government's investment in TasTAFE was working, with the training provider receiving seven years re-registration from the national regulator Australian Skills Quality Authority.

"We are committed to delivering on our long-term plan for TAFE, and ensuring that Tasmania has the skilled workforce it needs to support our growing economy."

Senator for Tasmania Helen Polley said due to funding cuts students at TasTAFE were 'suffering needlessly'.

"Students at TasTAFE have been forced to put their lives on hold with courses being cancelled with no prior warning," she said.

"This is the TAFE reality in Tasmania but it seems that the Liberal Senate Team can't do a thing about it under this Morrison Government."

The move from the Launceston city campus to Alanvale is expected to begin from 2020.