The change is likely to come into effect in late 2024 with an amendment to the Youth Justice Act, developed while the government looks to close the Ashley Youth Detention Centre and open two new therapeutic facilities for youth.

The change will also apply to children on remand.

Education, Children and Youth Minister Roger Jaensch made the announcement in budget estimates on Wednesday morning, detailing the range of other policies that will be implemented at the same time.

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These include increased options for prevention and early intervention for at-risk youth, additional options to divert children away from the court system, a broader range of sentencing options and trauma-informed restorative interventions.

There will be exceptions for serious crimes added "in the interest of community safety", Mr Jaensch said.

He said the change was intended to make custodial sentences for youth "truly a last resort".

"This announcement is about putting a marker in the ground, signalling a new approach for youth justice that will deliver better outcomes for young people and the Tasmanian community," Mr Jaensch said.

The government last year announced Ashley would close in 2024 following a series of allegations about child safety within the centre. The site near Deloraine will be converted into an adult prison.

The new youth justice centres were allocated $40 million in the recent budget.

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The age of criminal responsibility will remain 10, with the Tasmanian government preferring to wait on a consensus with other states to also raise this age.

Police will still have the power to arrest, search and hold children aged 10 and above.

Mr Jaensch said the government was seeking to establish a "nation-leading, best practice approach to young people in conflict with the law".

"We know that detention does not support rehabilitation or reduce the likelihood of re-offending for younger children," he said.

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"Early exposure to a detention environment can also further traumatise young people, expose them to problem behaviours of older detainees and increase criminal networks."

During the Commission of Inquiry, it was revealed the government will also be introducing US-developed multisystemic therapy for at-risk youth, offering families 24/7 access to clinicians who would visit their own homes.

The government conceded that fully staffing such a service would be a challenge, and was reliant on the establishment of greater training pathways via the University of Tasmania.

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