The $ 36 million Pacific Patrol Boat training program had been delivered by the Australian Maritime College for the past 28 years.

However it was revealed on Tuesday AMC had lost the tender for the training program to Queensland.

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AMC principal Michael van Balen said the COVID-19 pandemic had already significantly impacted the institution's ability to deliver the training well before the decision about the new contract.

"COVID-19 effectively ended the program in March 2020," he said.

'We have spent much of the year since then realigning our workforce commitments, prioritising cross-training of our staff, and pursuing other commercial opportunities within the defence and maritime industries.

"As a result of this work, the majority of AMC staff previously involved in Patrol Boat training are now employed in other parts of the college."

However, the loss of the contract sent a ripple through the Tasmanian political community, with Opposition Economic Development and Jobs spokeswoman Michelle O'Byrne describing it as a "significant blow" to the nationally renowned AMC.

"It's incredibly concerning that Queensland has been able to wrestle this important training package away from Tasmania, especially considering the AMC has being undertaking this course since 1992, for nearly 30 years," Ms O'Byrne said.

"During that time the AMC has gained a national reputation, particularly in the defence industry, for its capability and in one fell swoop Mr Rockliff has allowed it to slip through Tasmania's fingers.

"This will of course affect students who won't be coming to Tasmania to take that training anymore which is both devastating for not only the AMC but the northern economy."

However, in an email to staff, Mr Van Balen said the college was looking to grow in other areas, despite the loss of the contract being a disappointing outcome.

"I know this news will be disappointing to many of you and we will all miss the presence of the Pacific Islanders as their vibrancy and unique culture have added much value to the campus," he said.

"Looking ahead, AMC Search is in a strong commercial position and experiencing rapid growth in areas including defence, revalidation training, commercial simulations and vessel chartering.

"The organisation is also investing heavily in the design and delivery of digital training solutions targeted at online international maritime training markets."

Defence Minister Jeremy Rockliff said the AMC was exploring new opportunities in specialised fields such as autonomous vehicles and digital training packages and was being supported at a state and federal level.

"I recently went to Canberra to pursue a range of trade and defence opportunities for Tasmania, which included exploring future training opportunities at AMC," Mr Rockliff said.

"These discussions were positive and are ongoing. The Australian Government is investing heavily in the Defence and Maritime Innovation and Design Precinct at AMC which supports the Tasmanian Government's objective to develop world class defence and national security research, education and training capabilities."