AFL boss Gillon McLachlan has agreed to taking a decision in 2022 on the prospect of a club in the Apple Isle joining the league as a 19th team.

It comes after tense negotiations between the Tasmanian government and the AFL after the release of an independent report into the merits of a team based in the state.

Colin Carter's report put three options on the table: relocating an existing club to Tasmania, a "quasi team" playing most of its home games in the state but remaining in its current form, or creating a new club.

"I'm very pleased to announce that after further discussions with the AFL and Gillon McLachlan over the past week, we have now reached an agreement on the timeframe for a decision on a Tasmanian AFL licence," Tasmania premier Peter Gutwein said on Tuesday.

"The decision on a Tasmanian AFL license will be made, once and for all, in 2022 in line with the finalisation of the funding model for the AFL industry for the 2023 and 2024 seasons.

"The AFL and the state government will work through the matters raised in the Carter report ahead of a final position being put to club presidents for a decision on a Tasmanian AFL team.

"A historic decision will be made as early as possible next year on whether Tasmania will have its own team."

It also comes as sweet relief to Hawthorn and North Melbourne, who have financially lucrative agreements with the Tasmanian government to play home games in Launceston and Hobart.

The decision allows for the Hawks and the Kangaroos to continue those contracts in hosting games in Tasmania, after Gutwein threatened to scrap those deals following the release of the Carter report.

McLachlan said a decision on a new club would coincide with club funding and collective bargaining agreements for the 2023 and 2024 seasons.

"We need to finalise the industry funding model with the 18 clubs given the continuing impact of the COVID pandemic and have undertaken that once that work is done," McLachlan said.

Australian Associated Press