The future of Tasmania's Boyer Mill is no longer in doubt thanks to an $84 million investment partnership between the Federal Government, the Tasmania Government and mill owner Norske Skog.

Regional Australia Minister Simon Crean today visited Boyer Mill with Tasmania Premier Lara Giddings and Federal Member for Lyons Dick Adams following last month's announcement of a $28 million Federal Government grant towards the partnership.

The $84 million project, with funding from mill owner Norske Skog ($43 million) and the Tasmanian Government ($13 million loan), will diversify the mill's production, creating the capability to produce 140,000 tonnes of magazine grade coated paper each year.

Mr Crean said the $28 million investment, which will secure 330 direct jobs, 900 indirect jobs and create a further 100 jobs in the construction phase, will ensure Tasmania's forestry industry can continue to diversify.

"There is broad support for the paper machine conversion at Boyer Mill, which will further diversify production and realign the mill's output with demand in the Australian paper market," Mr Crean said.

"The ramifications for not supporting this project could have been dire given the mill supports over 1,200 jobs and injects $140 million into the local economy each year.

"This is an important investment in Tasmania's economic future and builds on the Tasmanian Forests Intergovernmental Agreement (TFIGA) and the Australian Government's $120 million for economic diversification.

"It will ensure the ongoing viability of the Tasmania forest products industry and will support manufacturing jobs.

"As the Tasmania economy diversifies, it is imperative we consolidate a value-added sustainable forest product industry.

"Norske Skog's move into coated paper will reduce Australia's current 100 per cent reliance on imported coated papers, providing security of supply and protection from fluctuations in the Australian dollar for Australian users of coated paper. 

"The project will also improve Australia's balance of trade figures by approximately $130 million.

"There will be strict conditions on Australian Government funding to ensure jobs are protected and that the mill can deliver on diversifying and providing a product that will ensure its operation for years to come," Mr Crean said.

Ms Giddings said the investment partnership was fantastic news for Tasmania and the people of New Norfolk who rely on the operation for jobs and economic activity.

"It is a clear sign of confidence in the future of the Tasmanian economy, the broader community and our forest industry, which is a major supplier to the Boyer Mill," Ms Giddings said.

"Norske Skog has given a commitment to source Tasmanian suppliers and local employment for the redevelopment in order to further support the local economy.

"This investment will complement the work already being undertaken to build jobs and economic opportunities in Tasmania.

"The upgrade will allow the mill to satisfy the growing market demand for catalogue grade paper. By moving with the times we can be confident the mill will have a long future.

"The Boyer announcement follows recent commitments by major Northern employers BHP TEMCO and Pacific Aluminium to remain in Tasmania for the long term, securing the future of around 1000 jobs," Ms Giddings said. 

Mr Adams said the funding will be provided to the project in the 2013-14 financial year.

"The project will secure and create local jobs and will build certainty and confidence for other investments in the region.

"It will also allow the Derwent Valley to start to recover from the huge impact the downturn of the forest industry has had on the area.

"$20 million worth of projects have already committed to in 2011-12 under the package to support the creation of jobs and deliver real opportunities for a sustainable future utilising Tasmania's competitive advantages of being the clean, green state."