The largest irrigation project so far in Tasmania's North East has moved a step closer.

The Deputy Premier and Minister for Primary Industries and Water, Bryan Green, today announced Government approval of the business case for the $28 million Upper Ringarooma Irrigation Scheme which could significantly boost local dairy production.

"We are seeing huge investment and hundreds of new jobs in the dairy industry with milk production in Tasmania growing faster than anywhere in Australia," Mr Green said.

Mr Green said the scheme would benefit more than 40 properties in the district covering over 15,000 hectares.

"This new scheme has great potential because currently less than half of the irrigable land is being irrigated. "It is prime dairying country and will provide further opportunities for farmers to profit from the expansion of our dairy sector and other high value crops like poppies," Mr Green said.

Mr Green said the Ringarooma scheme would be the third major irrigation development in the North-East following completion of the Headquarters Road dam and Winnaleah schemes.

"Investment in the North East doesn't stop there with major projects like the $400 million Musselroe wind farm and the $20 million redevelopment of the Defence Science and Technology Organisation's nutrition research facility at Scottsdale.

Mr Green said a $42 million State and Federal Government package would see upgrading of freight roads in the region as well as improvements to the Tasman highway between Scottsdale and Launceston. 

"The Government is continuing to look at other investment opportunities that will provide long term benefits in this important region of Tasmania.

Mr Green said the continuing roll-out of irrigation schemes around State in partnership with farmers was underpinning the expansion of the primary industries sector.

"We are seeing irrigation projects that once were only dreamed of like the $104 million Midlands scheme which is the biggest water development ever in Tasmania.

"Four major schemes have been completed in the past 18 months with a further two under construction, three with approved Business Cases and another four possible projects at various stages of development.

"The Government is strongly focussed on capitalising on the benefits irrigation can deliver for farmers, rural communities like the North East and the economy generally.

Mr Green said irrigation water from the Ringarooma scheme would be offered for sale to farmers next month and the project could proceed next year and be operating in the 2015-16 irrigation season.