A new development adjacent to Hobart's iconic Theatre Royal will create a massive economic stimulus and enhance Tasmania's reputation for excellence in art and culture, the Premier, Lara Giddings, said today.

The $75 million project, which is awaiting the outcome of a Federal funding bid, is the latest in a long line of projects that are literally changing the face of the capital city and beyond.

Ms Giddings congratulated the University of Tasmania for coordinating a vision to transform the car park next to the Theatre Royal into a thriving arts precinct, with NBN-enabled connectivity to Inveresk in the North and Cradle Coast in the North West.

"It is estimated that the project will create 255 jobs during the planning and construction period, along with $660 million in direct and indirect economic benefits over the next seven years," Ms Giddings said.

"This is an exciting project that will involve the relocation of the University's Conservatorium of Music along with the creation of a new performing arts space and recital hall and amenities for the Theatre Royal.

"The development will allow closer collaboration with nearby cultural institutions like the Tasmanian Museum and Art Gallery and the Tasmanian Symphony orchestra. 

"It will create innovative links with the University's campuses statewide including the Inveresk arts precinct and the creative industries of the North West Coast."

Ms Giddings said the State Government had supported UTAS' funding submission to the Commonwealth Government for $37 million under the Education Infrastructure Fund regional priorities round.

"Should the application be successful, as the owner of the Theatre Royal, the State has agreed to contribute $15.2 million to the project which includes land valued at $2.3 million, $900,000 for archaeological investigations and $12 million for the facility."

"This is another example of the Tasmanian Government working together with the private sector and institutions like the University of Tasmania to stimulate the economy and enhance the appeal of our state for residents and visitors alike.

"What is exciting about this project is that it is not just about physical buildings.  Emerging technology like the NBN creates the opportunity to take lessons and performances across the state and around the world."

Ms Giddings said the project was one of a number of exciting economic stimulus projects announced this week including the Tasmanian Government's $3 million Innovation Investment Fund and a $100 million affordable housing project at Brighton.

Other major projects currently planned or under construction in Tasmania include:

- The University's Institute of Marine and Antarctic Studies;

- The University's Medical Science development;

- The Myer redevelopment;

- The $35 million renovation of the Tasmanian Museum and Art Gallery;

- The transformation of Macquarie Wharf 2 into an Antarctic research and cruise ship terminal;

- $50 million to remediate the Macquarie Point rail yards to prepare the massive site for commercial development;

- The accompanying construction of a new Brooke St Pier ferry terminal;

- Confirmation this week of Bunnings' plans to build a second store in Launceston.