The draft legislation outlines the proposed business model for TasTAFE and comes after recommendations from the Premier's Economic and Social Recovery Advisory Council earlier this year.

PESRAC found that TasTAFE was not responding to the needs of industry and that students were being "shortchanged" on learning hours.

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"I don't want our businesses to be employing people from interstate in the coming months and years because our training provider is not empowered as nimbly, as quickly, and as flexibly as the businesses it seeks to serve," Premier Peter Gutwein said at the time.

Minister for Skills, Training and Workforce Growth Sarah Courtney said the proposed transition and flexible learning options will make it easier for Tasmanians to gain employment in growing sectors such as construction, tourism, hospitality and aged care.

"This is about strengthening TasTAFE and making it ready for the future," she said.

"And importantly, allowing more Tasmanians to enter industries that are growing or to move to other industries."

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Ms Courtney confirmed that existing TasTAFE trainers would not face forced redundancies and that TasTAFE would remain not-for-profit.

Gradco general manager Neil Armstrong said he welcomed the proposed changes and hoped the increased flexibility would encourage more school leavers to enter the industry and current employees to upskill.

"We would probably be looking at 30, 40 people who we would run through a TAFE course if we could get that flexibility and balance with the course structure."

The proposed changes were also supported by Tasmanian Chamber of Commerce and Industry chief executive Michael Bailey

"The current model isn't working and we have to do things differently if we are going to create more jobs and opportunities for Tasmanians," he said.

"The TAFE model we have now is last century thinking and it shows.

"We need to bring TasTAFE into the 21st century and that's what this proposal does."

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