The airline which is headquartered in Canberra will offer four return flights a week to the Tasmanian capital on a 34-seater Saab 340B Plus aircraft.

Tickets prices start from $219 one way.

If Tasmania lifts its restrictions on the entry of non-Tasmanians earlier, the service could start earlier. Also, if the demand is there, the plan is to expand to 11 flights a week next year.

"Detailed research has identified a strong demand for direct flights between Canberra and Hobart and the proposed service will not only facilitate travel between the ACT and Tasmania, but also provide a convenient and cost-effective alternative for passengers wanting to connect from Canberra to other domestic destinations", Link chief executive Andrew Major said.

"We're excited to partner with a local Canberra business to connect travellers with Tasmania. It is the second airline in less than a week to announce new services from the capital, adding further confidence that we are restarting aviation in Canberra," Canberra Airport's head of aviation Michael Thomson said.

Canberra Business Chamber welcomed the expansion of services.

"The more we can move people around the country and into Canberra, the better it will be for our visitor economy," the chamber's chief executive Graham Catt said.

"One of the things which has been a real issue for business confidence has been border closures."

He said that business people were increasingly meeting face-to-face again.

Chief Minister Andrew Barr said: "I thank Canberra Airport and Link Airways for their confidence in the route - a great success story for a Canberra-owned airline which will lead to more visitors and more jobs for Canberrans."

As border restrictions are being eased, new routes are opening up. Qantas has resumed flights from Canberra to Adelaide on four days a week. Virgin Australia is to resume to the South Australian capital on October 12.

Qantas has also taken over some routes to the Gold Coast which were previously flown by Virgin.

The airport's strategy now is to seek out smaller airports and bypass Sydney, Melbourne and Brisbane if necessary.

The other arm of the strategy is to secure partnerships with small airlines as Qantas and Virgin Australia go through their ructions of bankruptcy in the case of Virgin and major job losses in the case of both of them.

Recently, the airport started direct flights to Ballina as a gateway to Byron Bay and northern New South Wales. The service has now been extended until at least October 23.

The airline there is FlyPelican which describes itself as "your local NSW airline".

Another regional airline, Alliance Airlines based in Brisbane, will begin a twice-weekly service to the Sunshine Coast and Cairns from October 23, now that Queensland has opened its borders.

"There is probably a capacity to sustain four flights a week once it gets up," Canberra Airport's head of aviation Michael Thomson said.

"Like all airline agreements, there's an agreement for a period of time and you see how the route goes, but we're confident it will stay as a permanent arrangement."

The airline in the new route is to be announced today. It is not well known outside the industry.

On Saturday, Canberra Airport resumes seven day operation after cutting back services at weekends and looking to cut back in the week as well.

Chief Executive Stephen Byron had set himself a date of October 1 to decide whether to "put the airport to sleep", as he put it. In the event, border re-openings have led to expansion instead, though to nothing like pre-COVID-19 passenger numbers.

At the time, fewer than a hundred passengers a day were flying daily in and out of the terminal, which has a capacity of 22,000 people each day.