Acting Premier Bryan Green said today he was disappointed the incoming Chair of Forestry Tasmania Miles Hampton had decided to step down.

"Forestry Tasmania is a Government Business Enterprise and the Chair needs to be able to operate on a commercial basis with reference to Government policy," Mr Green said.

"It is disappointing that Mr Hampton has chosen not to accept the role."

Mr Green said the Government was committed to ensuring Forestry Tasmania was a strong and sustainable GBE.

"The Government recognises it is an extremely challenging time and we will work through the normal processes to have a stable board within Forestry Tasmania," Mr Green said.

Mr Green said Adrian Kloeden would remain as Chair till the end of the month and that Cabinet would make a decision shortly on his replacement.