A Launceston Show Society debt of $150,000 will be required to be repaid to the City of Launceston council as part of a lease surrender.
The show society approached the University of Tasmania last year offering the lease it has with the council, for the university to use as a car park.
As part of the $1.3 million deal, the council have to approve the lease being given to UTAS as the council owns the land.
The council will vote on the plan at its meeting on Thursday, with a recommendation to approve the lease surrender.
The council's agenda said the proposal would meet public and UTAS parking demand, with parking spaces available on both sides of the river, servicing both ends of the precinct.
Parking on the Willis Street site would cater for UTAS staff and students only, with public parking at either end of the precinct.
Mayor Albert van Zetten said any decision made by the council would be limited to the lease arrangements for the Inveresk site.
"Any proposal for car parking by the university will still need to go through all relevant formal planning approval processes," he said.
The council will receive the revenue from the public parking area on the site and from parking charges during sporting, entertainment and other events.
"In return for UTAS funding the development of the car park, the [council] would be responsible for the maintenance costs of the car park throughout the licence period," the agenda item said.
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The Launceston Show will run on the site in 2020, but future events are a matter for the show society, Cr van Zetten said.
"If the council does agree to the surrender of the lease, the society will be required to repay an existing debt to the council of more than $150,000," he said.
Show society president Brian Bennett said the feedback since the announcement had been really good.
"I went to a session with UTAS this morning where they outlined the proposed car park they're going to put in and the people there were pretty happy with the concept," he said.
"So that's good. It's certainly a step in the right direction."
The society has looked at some potential sites, but Mr Bennett could not say anymore. He said the $1.3m would clear the show's debt. The society held a full meeting on Thursday night to brief everyone.
"It was a very positive outcome and certainly got a few people revved up," Mr Bennett said.
The council meeting will be held at 1pm on Thursday at the Town Hall.
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