Tasmania's biggest caged egg producer is making a move to free range production.

Forty percent of the company's output now comes from two massive Dutch designed sheds that are each home to 15,000 layers.

"It's about 70 metres long by about 17 metres wide, designed to hold around 15,000 birds," Danny Jones says of one of the sheds.

"It's quite a cool day and little bit of breezy, but as you can see, there are quite a few birds out enjoying the day."

Construction started in January 2013 at Pure Foods' Longford farm, and took about six months to complete.

Pure Foods managing director, Danny Jones, says the new housing system cost more than $2 million.

The company is hoping to receive a share of $3 million the Tasmanian Government has promised to provide, to help current cage egg producers make the transition.

Danny Jones says Pure Foods was prepared to invest in a specialised system to deliver good animal welfare outcomes, productivity and meet the supermarket's requirements for free range eggs.

"We did a lot of research, we visited Europe to look at the latest technology," he said.

"This is the latest and greatest in free range shedding equipment.

"It's a fairly three dimensional system where the birds can go up and down, underneath, over the top and then outside through the pop holes.

"So it gives the birds a chance to interact in a way that's not been seen in conventional slatted floor free range systems.

"They build a lot of strength up, because there's a lot of jumping.

"The system also provides plenty of perching and ready access to feed and water."

The system is near the high end of stocking densities and is highly automated for everything from egg collection to manure removal and feed, water and atmospheric control.

Pure Foods' livestock manager John Satler says the transition from small cages to the new sheds has been both challenging and rewarding.

"It's so innovative," John Satler said.

"The computer controls feed, temperature, water.

"It really has been a challenge in the last few months.

"But we've been very successful and this flock has been managing 95 per cent rate of lay for the last three weeks.

"And if you have a look at the birds they look so healthy and when you've got 95 per cent [0.95 of an egg per bird per day] you know you're doing quite well.

"That's equal to our best caged production.

"So when we can get that out of a free-range system we're doing pretty well."

As well as phasing cages out in the commercial egg industry, Tasmania's new care and management standards for chook housing, stocking density, the provision of food and water apply to all commercial egg producers including existing free range and barn operations.