The North East rail corridor has sat dormant since freight stopped in 2005, but a decision on its future use has been met by differing views.
Despite this, the Dorset Council is pushing ahead with its plans to build a bike trail between Lilydale and Scottsdale by lodging a development application.
The DA is for about 26 kilometres of the council's proposed Rail Trail, for a section running from Wyena to Scottsdale Railway Station.
The remaining 14 kilometres of the estimated $1.5 million trail sits within the City of Launceston council area and will be subject to a separate planning application.
Dorset mayor Greg Howard said negotiations on the 14km stretch in the Launceston municipality had begun.
"We are on track now," he said.
"It's a bit of a relief, it has been a painful journey with so many ridiculous interruptions."
Use of the corridor has been a contentious issue for the region for years. With proponents of a heritage rail line from Launceston to Lilydale wanting the track to remain in tact despite plans for a bike trail.
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The proposed bike trail will include the decommissioning of former rail infrastructure, such as rail and sleepers, construction of trail surface, construction of decking and handrail along bridge crossings and associated signage.
The council will make the final decision on its own DA, but an independent planner will access it first and provide a recommendation based on planning scheme requirements.
On average the path will be about 2.5 metres wide, for bike riders and walkers to share, and will range from two to three metres in width in parts.
Councillor Howard said once the entire 40 kilometre rail trail was established, and linked with the existing 28 kilometre track between Scottsdale and Billycock Hill, it would bring a substantial boost to the community's economy.
"The first section is not long enough to attract interstate or intrastate travellers," he said.
"At the moment it would be used for recreation for locals, but once the whole trail is built it will become a genuine tourist attraction.
"It's the intention to make it an experience. We hope more product and accommodation will meet the line in future."
The Tasmanian Heritage Council granted the council an exemption to undertake works at the railway station at Ellenor Street. It proposes constructing the trail parallel to the platform and marking out 10 car parks at an existing gravel area. However, historic rail infrastructure at the site will remain unaffected.
The station will act as one of two trail heads proposed for the project, with the other at Lilydale Falls to be considered in the separate application
The DA said the number of vehicles entering and exiting the trail head would not exceed 40 per day as it was expected users would arrive in a group format or via a bicycle.
It noted the existing rail infrastructure was visible from several locations along Golconda Road and subsequently the rail trail would be, but no natural vegetation screening would be removed.
However, juvenile vegetation growth near Carins Road and overgrown grasses near the station will be removed to facilitate the works.
The development application is available for pubic comment on the council's website until January 25.
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