The Heritage Council made the decision at a meeting this week, concluding a program of historical research and archaeological investigations determining if the site met the eight registration criteria.

The site was uncovered in November last year as part of works on a City of Launceston-approved subdivision, prompting the investigation.

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Tasmanian Heritage Council chair Brett Torossi said that while the convict story was important to Tasmania, the impact of post-colonial agriculture and subdivision works meant the site did not meet heritage listing criteria.

"The Heritage Council's conclusion was that the combination of these factors have reduced the heritage values and diminished the integrity of its features to the point where entering the site on the Heritage Register could not be justified," she said.

"Instead, the emphasis will be on exploring if the archaeological reports can be made available to the public, transferring the artefacts from the site to a suitable repository and how to best interpret and share the story of the site."

A site believed to be the Kings Meadows Convict Station had been entered into the heritage register in 2011, but its location was incorrectly listed in Relbia, raising questions about the accuracy of other listings.

The discovery of the correct location at Kings Meadows earlier this year excited historical groups, including the Port Arthur Historic Site Management Authority, which manages Tasmania's World Heritage listed convict sites.

The Kings Meadows Convict Station was established as a work camp in August, 1836, before the station itself was completed in July, 1837 and closed six months later after the abandonment of the Evandale to Launceston water scheme. The water scheme's entry in the heritage register will be reviewed to find other convict stations that could warrant recognition.