Updated irrigation scheme 'better aligns with demand in the region'

The previous year's launch did not meet the threshold to succeed, after farmers failed to reach the viability threshold in water sales.

The new scheme will provide access to 13,500 mega-litres of irrigation water compared to last year's proposed 24,500 mega-litre scheme.

It will deliver water to farmers in Beaconsfield, Legana, Rowella, Hillwood, Pipers Brook and Pipers River areas in Northern Tasmania at a cost of $165 million.

goFARM head of farmland development Joe Barlow said the scheme was a "huge positive" for his farm.

"We've invested in this property and we've just started our stage one development of vineyards," Mr Barlow said.

"Without the water through this valley, we're not able to do what you can see behind us; the TI scheme is going to allow us to continue to developing.

"We're going to be capped out soon without water, so we need some water to continue to invest in and develop the area."

Tasmanian Irrigation executive officer Andrew Kneebone said the redesigned scheme was brought back to better meet the demand of the region.

"High purity water is the backbone to many of our agricultural activities," Mr Kneebone said.

"And it is the thing that that allows people to go and invest and continue to grow the agricultural sector in the state."

He said scale was the major difference in this second round.

"It ended up being too big, it was the right size for the ultimate development of irrigation but sometimes you've got to stay to these things," he said.

"So we've gone with a much smaller scheme which would better match the current demand from the irrigators."

Primary Industries and Water Minister Jo Palmer said the new scheme would give farmers confidence and ability to grow and develop their farming operations.

"If we want to reach our agricultural target to grow the Tasmanian farm gate of agriculture to $10 billion by 2050, we need to get water and high surety water to our farmers," Mrs Palmer said.

"This is a fantastic business model; it's a 50 per cent investment from the federal government and a 25 per cent investment from the state government.

"And then we ask our farmers to also invest 25 per cent into the development of an irrigation scheme and that's where our water sales come in."

Water sales are open until the end of February, with the project expected to be up and running by 2028.