Tasmania's forest peace deal will save more than 500 jobs in the state if it is implemented, a new study says.
A report into the social and economic impacts of the historic deal between the timber industry and environmentalists says 678 direct jobs will be lost if the agreement falters.
It says 142 jobs will go in the declining forestry sector if the deal goes ahead.
Implementation of the $378 million deal is on a knife's edge as a Tasmanian upper house committee examines the bill that would give the agreement effect.
Passing the legislation would mean the protection of 500,000 hectares of forest in the state and, with some of the money already spent, an injection of $240 million to restructure the ailing sector.
"What this report does in a revealing way is to present the alternative if no agreement happens because the market will strip away the jobs anyway," federal regional affairs minister Simon Crean told reporters in Hobart.
"It's starkly putting the choices before the players."
The report found around 400 direct and indirect jobs will be lost with the agreement, but that figure rises to 1900 without it.
Mr Crean said the report could be a "watershed" for members of the state's Legislative Council, who would be briefed in coming days.
"If we simply proceed down the path of intransigence, where no one's prepared to be convinced by any argument, quite frankly you will have an industry that will go into a faster decline," he said.
The forestry industry in Tasmania halved between 2006-11, the report says, from around 6400 employees to 3260.
The number of businesses collapsed from 510 to 372.
Legislative Councillors are already under pressure to pass the bill with major employer Ta Ann to reconsider its future in the state if the deal fails.
Mr Crean said federal funds were already being used to diversify the industry into producing sustainable wood products for the building sector.
Tasmanian Premier Lara Giddings urged the upper house to pass the legislation.
"It has now been over two months since parliament debated this legislation and I believe there has been more than enough time to make a decision," she said in a statement.
The state opposition has said it will tear up the agreement, which was signed in November last year after more than two years of negotiation.