In short:

A contentious hotel development on Hobart's eastern shore has bypassed local council planning rules to be green-lit for consideration as a major infrastructure project for the state.

Chinese developer Chambroad has successfully applied for its Kangaroo Bay hotel project to be assessed by the state planning office, despite being locked in a court battle over a land buyback proposal by the local council after failing to meet major construction timelines.

What's next?

The project will be assessed by an independent expert panel, appointed by the Tasmanian Planning Commission, with construction expected to begin six months after receiving clearance.

A contentious boutique hotel development for Hobart's eastern shore has been granted "major project" status by the Tasmanian government and will be assessed before an independent panel, bypassing the local council.

Chinese developer Chambroad is seeking to build a 155-room, five-star hotel at Kangaroo Bay at Rosny, but the project has faced multiple delays and community opposition, with Clarence City Council last year voting to buy back the land.

That process is currently before the Supreme Court.

On Thursday, Planning Minister Felix Ellis said proposals like Kangaroo Bay were the "driving forces for economic growth, job creation".

"After consideration of the Major Project proposal, and on advice from the State Planning Office, I am of the opinion that the project has the necessary attributes to be declared a major project," he said.

"The proposal sets out that 100 full-time-equivalent jobs will be created for the hotel's construction alone, adding to the continued pipeline of work for our tradies, including our next generation of apprentices who will have more opportunities to learn their craft on site.

"This development will have a direct impact on the region's economy, with forecast visitor expenditure growth of $500 million over 10 years."

He said the community would have multiple opportunities to "have their say on the project over the course of its assessment".

Decision sets a poor precedent, mayor says

Clarence City Council mayor Brendan Blomely told ABC Radio Hobart Mornings on Thursday it wasn't "the right decision".

He said, in the council's view, it was an "identical proposal" to that which "was comprehensively rejected by (former planning minister) Michael Ferguson in September last year".

"And disappointingly, potentially, there could be significant costs now for both the state and local government.

"[It's] a waste of resources because we are … currently before the Supreme Court to buy that land back as per the original sell-and-development agreement with Chambroad."

Cr Blomely said he wanted to see the process deferred, "until the matter of ownership of the land is resolved".

"Sadly, this now sets a precedent for a very low threshold for future [major project] applications, which will see local planning authorities bypassed around the state.

"And that's not a good thing for planning in Tasmania."

Independent planning panel to review project

Kangaroo Bay project manager Greg Hudson said the state government's declaration gave the development the opportunity for a fair hearing.

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"Declaration as a Major Project demonstrates the significant impact this project will have across the entire southern region," Mr Hudson said.

"[It] will be extremely beneficial to all eastern shore residents by creating better facilities and services for the southern region, for visitors and for the Tasmanian hospitality and tourism industry."

He said if the independent panel approves the project, construction was expected to commence six months later.