A youth housing development on the fringe of Hobart's CBD is expected to create more than 100 new jobs.

A former adult learning site in North Hobart will be transformed into 46 independent living units.

It includes 16 units for people with disabilities, plus support and educational services.

The Premier, Lara Giddings, says it will generate about $34 million in economic activity.

"It's creating jobs in the construction industry, it's also of course creating those opportunities for young people who will have their education and training available to them very close to where they'll be living as well," she said.

"Most importantly it helps to provide support services to very vulnerable young people."

Human Services Minister Cassy O'Connor says Tyne House in Launceston has already proven the model is a success.

"We've seen around 75 per cent of the young people who live there reconnect with education, training and employment opportunities; over half reconnect with their families; over 80 per cent establish greater links with health and other support services," she said.

"What you see at Tyne House, and what we'll be able to recreate here, is a fantastic community."

The development will be completed by mid next year.