Tasmania's peak business group believes the relocation of the University of Tasmania to Inveresk proves that a similar move in Hobart would be a success.
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The Tasmanian Chamber of Commerce and Industry has thrown its support behind UTAS relocating from Sandy Bay to Hobart's CBD.
TCCI chief executive Michael Bailey said the relocation of Launceston's University of Tasmania campus from Newnham to Inveresk was a great example of the benefits relocation will bring.
"Relocating facilities to Inveresk has been a success," Mr Bailey said.
"It's generated a real economic boost for Launceston, initially through the building and construction works and now by making Launceston's retail, hospitality and entertainment businesses more sustainable.
"Not only that, by moving the campus to the city it's made UTAS much more accessible to many more people.
"The impact on traffic has been negligible and if anything, it's encouraged the uptake of public transport and options like bikes or scooters."
Mr Bailey said that he has spoken with businesses in Hobart on the issue.
"I've seen the debate going on in Hobart and I've made a point of talking to many Hobart businesses. The feedback has been quite positive. Many businesses are looking at what's happened in Launceston and hoping that the relocation project proposed for Hobart will bring just as many benefits.
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"Just like the Launceston community a few years ago, there are going to be questions and concerns, but you only have to look at Launceston to see that relocation can be done in a sensitive, sustainable way that will benefit the whole economy.
"The TCCI strongly supports this project and we look forward to working with UTAS to see the relocation through in Hobart and to continue the development in Launceston."
In response to arguments that the Sandy Bay campus is still serving it's purpose Mr Bailey disagreed, saying that the campus would require extensive upgrades in order to remain in usable condition.
"The campus isn't fine," he said.
"The campus is past it's used by date and many of the buildings need huge renovations done to them. What we know is university cities around the world are performing better than isolated, suburban universities."
"Universities need to be woven into the fabric of the city and this is why it's so important. It's been happening in Hobart for some time now too, with the Medicine faculty being placed in the CBD. By placing the rest of the university into the CBD in a strategic way there will be better access for people."
Construction continues at the Inveresk site in Launceston, with works on the River Edge and Willis Street buildings to be completed over coming years.