Vibestown released a statement on Friday that said due to the tightened COVID-19 restrictions implemented by the Department of Public Health on Tuesday, the event would have to move sites.

Vibestown Productions director Jesse Higgs said the company had been working with the Department of Public Health for months.

"We have done everything in our power to make sure the Basin Concert could go on within the integrity of what the event deserves, but due to the complexities of the Basin site and the updated restrictions, we have had to make the impossible decision [to move sites]," he said.

The event will move to Inveresk Park - approved with a COVID-safe plan.

The announcement followed a post on the concert's Facebook event page which said dancing and vertical drinking at the Basin site would not be allowed due to the imposed restrictions.

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"We didn't get full details of the severity of the restrictions up until this point," Mr Higgs said. "[However] we are thankful for Public Health and all they have done to keep Tasmania safe during these times - it's not an easy job making unpopular decisions and we respect what they are doing."

Director of Public Health Dr Mark Veitch said the service was committed to working with event organisers to ensure large public events could run safely in Tasmania.

"Current COVID-19 restrictions limit dancing at larger outdoor events to 250 people, provided this is in accordance with an approved plan for the event," he said.

"If an event organiser wishes to include dancing in their plan - and can demonstrate they can manage people dancing in accordance with COVID-safe protocols - there is no impediment to this happening."

Mr Higgs said with the concert moving to a new site, there was a good chance dancing may be allowed.

A government spokesperson said the Public Health Requirements for The Basin Concert had not changed since the application was submitted in January.

"Working with Vibestown, Public Health were able to get this event plan to a point where it could be approved," the spokesperson said.

Mr Higgs said Facebook comments had been turned off on posts do to with restrictions to avoid the event being poorly portrayed, but Vibestown was gathering feedback on the situation via an email sent to those attending the event.

"We're just trying to do our best to keep live music alive in Tasmania and we'll need your support," he said.