Bell Bay had previously been shortlisted for the Commonwealth's $464 million clean hydrogen industrial hubs program, and the announcement follows a series of promises for other hubs in Queensland, Northern Territory and Western Australia.

The Tasmanian Government had applied for the funds in November to provide shared infrastructure for Fortescue, Woodside, Origin and ABEL Energy as they progress individual plans for production facilities.

READ MORE: YMCA Launceston seeking emergency funding to stay open beyond June

Prime Minister Scott Morrison said the initial operation of the hub was expected to create about 1000 jobs, and more as each project comes on board.

"Bell Bay is one of the best locations in Australia for a hydrogen hub, with its large scale hydro power capacity, industrial demand base, highly skilled workforce and export potential," he said.

Tasmania's green hydrogen hub will be used for ammonia production and export.

Fortescue's plans for a 250-megawatt facilities were the further advanced, while Origin had commissioned a feasibility study for a 500-megawatt facility.

The industry at Bell Bay was also reliant on power purchasing and water access agreements.

A newly-formed Renewables, Climate and Future Industries Tasmania government business has been driving the state's push for Commonwealth funding, drawing upon support from the private enterprises involved.

The coalition commitment also includes $3 million for Origin Energy's green ammonia export project, with a total project cost of $6 million.

READ MORE: Almost all of Tasmania's rentals unaffordable for low income earners: report

Bass Liberal MHR Bridget Archer said the funding promise was a "massive coup" for Northern Tasmania.

Earlier this week, the coalition announced further hub locations in Gladstone and Townsville in Queensland, following on from announcements for hubs at Kwinana and The Pilbara in Western Australia, and one in Darwin.

The Bell Bay announcement will be confirmed on Friday.

Hydrogen is created through a process of electrolysis, using electricity to split water. It is highly energy and water intensive, creating some concern regarding the pressure on Tasmania's renewable energy capacity and water storage facilities.

READ MORE: Government open to increasing lower house size from 25 to 35

The use of renewable energy - such as Tasmania's hydro power - makes hydrogen production considered "green", whereas the use of natural gas is behind "blue hydrogen". Green hydrogen could improve Australia's access to Asian markets such as Japan and South Korea.

Labor had been critical of a perceived slow pace of establishing hydrogen production hubs across Australia, believing it could be weakening the country's global competitiveness in the space.

Last month, Labor energy spokesperson Chris Bowen said the government had promised hydrogen hubs in the 2021-22 budget but this had not occurred, and then did not confirm this funding in the latest budget.

Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: