A deal has already been signed with a new builder, however, with expected delivery of the first ship pushed back to late 2022.

Infrastructure Minister Michael Ferguson has announced TT-Line and Flensburger Schiffbau-Gesellschaft mutually agreed to cancel the contract that would have seen the new Spirits enter service next year.

IN OTHER NEWS

Delays in the building of other ships - and uncertainty over FSG's finances - made it appear increasingly unlikely the TT-Line vessels could be delivered on time.

A Memorandum of Understanding signed between TT-Line and Finnish ship builder Rauma Marine Constructions sets "targets of late 2022 for hull 1 and late 2023 for hull 2", Mr Ferguson said.

That means the existing Spirits will sail on beyond the next state election due in 2022.

"The current Spirit of Tasmania ships continue to operate safely and efficiently, and are already emissions compliant as was required by 2020," the Minister said.

RMC was founded in 2014 and aims "to be the leading provider of car and passenger ferries in Europe".

It has contracts to build ferries for Scandinavian lines and corvettes for the Finnish navy at its shipyard at Rauma on the country's west coast.

Mr Ferguson commended TT-Line "for its prudent and responsible management of this significant investment, which has minimised exposure to the company and the state of Tasmania".

"Importantly, no payments to FSG have been made, and no payments will be made," he said.

"Furthermore, the majority of the work undertaken to date on the new vessels by TT-Line and their expert consultants is transferrable and can be utilised in the detailed design phase and contract negotiations with the new shipbuilder."