A deal between salmon farming heavyweights designed to improve the health of Tasmania's Macquarie Harbour has been backed by the state government but drawn the ire of environmentalists.
Tassal and Petuna on Thursday announced they would share fish farming operations in the harbour on the state's west coast.
The picturesque harbour - part of which lies inside a World Heritage Area - has suffered mass fish deaths and environmental damage due to overstocking.
A virus killed thousands of salmon late in November, with Petuna forced to cull 100,000 fish a month later to stop it spreading.
In March, the state's peak environment body admitted to the ABC that the harbour's leases were overstocked based on wrong science.
"Everyone wants a sustainable outcome out of the harbour," Tassal CEO Mark Ryan said.
"For us, getting this better biosecurity and environmental management framework is a terrific outcome."
Under the plan, baby fish will be separated from adult fish to improve biosecurity and leases will be rested on rotation to allow the harbour to recover.
But the Greens and Environment Tasmania believe the move doesn't go far enough.
"Macquarie Harbour needs to be fallowed immediately," MP Rosalie Woodruff said in a statement.
"It's the only way to begin a natural rebuilding process to address the almost zero oxygen levels and the dead zones caused by salmon farming practices."
A shared management committee will sit above Petuna and Tassals' operations.
Both companies insist no jobs will be lost, but 12 Tassal workers will get moved elsewhere in the state.
Tasmania's Liberal government said it is committed to sustainable salmon farming in the harbour.
"We have seen some improvements in Macquarie Harbour in recent months," Environment Minister Elise Archer said.
"If initiatives like these contribute to further improvements, it will be a good result for industry and our environment."
The two companies are awaiting a Federal Court ruling, after rival Huon Aquaculture brought legal action against the then-federal environment minister's decision in 2012 to allow fish farm expansion in the harbour.
Petuna and Tassal are parties to the case, and support the minister's decision.