Energy Minister Guy Barnett said Bell Bay was a strategically important location for the hub due to its status as an advanced manufacturing zone, supporting infrastructure, water availability and port access.

"The funding sought will establish the right environment and infrastructure necessary for operations to start unlocking the potential for large-scale hydrogen export and supporting domestic market activation in Tasmania and on the mainland," he said.

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"There is already significant interest in Bell Bay from some of Australia's largest potential hydrogen producers including Fortescue Future Industries, Woodside Energy, Origin Energy and ABEL Energy and we're proud that many of these companies have provided letters of support for our funding submission.

"Tasmania has a bold plan to leverage the state's unique advantages of infrastructure and renewable energy to create a thriving export-scale green hydrogen production facility."

The federal government has made available $464 million for seven hydrogen hubs in regional Australia.

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Bell Bay Advanced Manufacturing Zone chief executive Susie Bower said Bell Bay had long been highlighted as the most promising industrial precinct in the country for the emerging hydrogen production industry.

"Green hydrogen and ammonia are made from renewable energy, which is of course Tasmania's key point of difference," she said.

"Tasmania is the envy of Australia for our existing renewable energy production capacity and the future potential to generate more."

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Earlier this month, Woodside announced it had optioned a long-term lease on a section of land that was once slated for Gunns Tamar Valley pulp mill.

The company has plans to build a plant that would produce 200,000 tonnes of ammonia each year for export.

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