A new hospital laundry will be built in Launceston to service Northern Tasmania's public hospitals.
Tasmanian company BlueLine has won the contract to provide linen services to the Launceston General Hospital and eight primary health sites.
BlueLine plans to build a new laundry at a greenfield site in Launceston within three years.
The 10-year hospital linen services contract was signed on 19 September 2012 and includes the option of a five-year extension.
Initially, laundry will be processed in Hobart.
The contract is expected to save the state around $5.39 million over 10 years.
Tasmanian Health Organisation - North acting CEO Sonia Purse said laundry services were currently delivered with old, unreliable and inefficient equipment that was not keeping pace with increasing demand.
Ms Purse said laundry staff and their union have been briefed on the outsourcing process.
The existing laundry will continue to operate until 1 December 2012.
21 September 2012