Prime Minister Anthony Albanese and AFL CEO Gillon McLachlan at Optus Stadium in round two, 2023 and (inset) the Tasmania U18 logo. Picture: AFL Photos

TASMANIA'S dream of its own AFL and AFLW teams is a significant step closer to reality after the Federal Government confirmed funding for a new stadium in Hobart.

The AFL will now seek the approval of all 18 existing AFL clubs to grant a 19th licence for a Tasmanian club, with the AFL Commission to then meet.

Prime Minister Anthony Albanese on Saturday announced a $240 million commitment for the redevelopment of the Macquarie Point precinct in Hobart as part of the upcoming Federal budget.

FULL STATEMENT AFL responds to Tasmania funding decision

The urban redevelopment project will include a new multi-purpose stadium that will be the new home for the AFL's 19th club.

The League has already pledged to spend $360 million on a Tasmanian team, including funding for the new club, game development, grassroots footy, and $15 million towards the stadium.

The Tasmanian Government has already pledged $375 million towards the stadium, and the Federal Government funding contribution was the final piece of the puzzle.

Prime Minister Anthony Albanese and AFL CEO Gillon McLachlan at Optus Stadium in round two, 2023. Picture: AFL Photos

AFL CEO Gillon McLachlan thanked the Federal and Tasmanian governments for their funding decisions.

"For a club to compete and succeed on the national stage, it needs a home that enables and empowers it to compete from the start, on and off the field, and today’s announcement gives a potential Tasmanian club that opportunity," McLachlan said.

"It is why so much work has been done between the AFL and the Tasmanian State Government to ensure not just a team for Tasmania but a destination club, playing in a destination stadium, in a destination state.

"The stadium at Mac Point is the final workstream, with the question on a 19th licence to be answered in the coming days."

A destination club, playing in a destination stadium, in a destination state

- AFL CEO Gillon McLachlan

AFL games have been played in Tasmania every season since 2001, with Hawthorn (in Launceston) and North Melbourne (in Hobart) striking deals to host several games each year.

Tasmanians have been lobbying for their own AFL team since the 1990s and the movement has gained significant momentum in recent years.

Tasmania has a long history of producing talented footballers, despite not having a team in the national competition. Darrel Baldock, the captain of St Kilda's Team of the Century, three-time Brownlow medallist Ian Stewart and goalkicking giants Royce Hart, Peter Hudson, Alastair Lynch, Matthew Richardson and Jack Riewoldt all hail from the Apple Isle.

It would be the first time the League has expanded since Gold Coast (2011) and Greater Western Sydney (2012) joined the competition in successive years.

Gary Ablett leads Gold Coast players out for a training session at the newly opened Metricon Stadium in 2011. Picture: AFL Photos