Tasmania's public housing tenants will be able to choose a community-based landlord and access better services under a new State Government direction to transfer up to 4 000 houses to the community sector.

 "The new community housing organisations will be based in the communities they work with, ensuring tenants have more say over local decision-making," Ms O'Connor said.

"Tenants will be able to choose a community housing landlord and will benefit from the new approach and new services on offer, including more maintenance.

"Community housing organisations can offer better services, because, unlike government, they can leverage and invest private financing into housing."

Ms O'Connor said the program would be implemented over the next two years, giving tenants time to decide for themselves which landlord they prefer.

"Current public housing tenancies won't change but they will be managed by a new community housing organisation for the next two years.

"Tenants will meet with the community housing organisation staff and if they like what they have to offer, they can choose to take out a new lease with that provider.

"Housing tenants will be able to choose their landlord and stay in their home."

Minister for Human Services Cassy O'Connor told Budget Estimates today Stage 1 of the transfer was underway and would see the successful community organisation announced in July.

"We have already launched the transfer of around 500 houses in Rokeby and Clarendon Vale earlier this year and I've been pleased with the response from tenants I've met and spoken with."

Ms O'Connor said Stage 2 would transfer around 3 500 properties later in the year.  

"We are still determining which suburbs would be best suited for stage 2 and once that decision is made, we will inform tenants and hold community information sessions."

Ms O'Connor said the housing transfer would meet Tasmania's obligations under the Nation Building and Economic Stimulus Plan and National Affordable Housing Agreement to establish growth providers and commence the transfer of management of up to 35 per cent of public housing stock to the community housing sector by June 2014.