The federal government will pay $16 million into a public-private investment scheme designed to drive business and productivity in Tasmania.
The funds had initially been earmarked for Hobart's Cadbury chocolate factory during the 2013 election campaign in a deal that fell through in March.
"I don't want Tassie to miss out," Prime Minister Tony Abbott told the state Liberal conference in Hobart on Saturday, announcing the jobs and investment fund.
Along with the commitment from Canberra there will be $8 million from the Tasmanian government in the scheme which will provide a dollar for every $2 of private investment.
Mr Abbott said the fund has the potential to stimulate up to $72 million in investment for the island state.
"This $16 million in Commonwealth taxpayers' money ... is not just going to be given out on a whim, it's going to be given on a competitive basis," the prime minister said.
Projects eligible for the scheme will include those within the manufacturing, tourism, agriculture and innovation sectors.
It is a move welcomed by Premier Will Hodgman who said it is essential to attract private investment.
"Tasmania's economy is growing and we need to maintain the momentum," he told reporters after the announcement.
Applications for the scheme are expected to start before December.
"We anticipate there will be a lot of interest in this program," Mr Hodgman said.
During a visit to Hobart in September 2013 Mr Abbott pledged the $16 million to Cadbury for an upgrade of facilities enabling tours of the chocolate factory.
But in March the confectionery maker backed out of the deal, unable to come up with its $50 million share.
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