Thousands of chickens die in Tasmania fire

A shed fire started by a faulty heater in northern Tasmania has killed thousands of egg-laying chickens.

Thousands of egg-laying chickens have burned to death in a shed fire in Tasmania. (AAP)

Thousands of chickens have burned to death in shed fire near Launceston, leaving a devastated business facing costs of $1 million.

The shed, belonging to Olson's Eggs at Karoola, was home to up to 8000 egg-laying chickens.

It went up in flames around 4.30am on Wednesday in a blaze believed sparked by a heater used to keep young chicks warm.

Damage to the shed and the loss of stock and infrastructure has been estimated to total $1 million.

"Our crews spoke to the owners and they were obviously devastated, " Tasmania Fire Service station officer Darren Gye said.

"But they intend to pick themselves up and rebuild."

Fire crews from Lilydale and Rocherlea managed to stop the fire from spreading to a second shed containing thousands of chickens.