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Tasmania will close a juvenile justice unit linked to historical abuse, excessive use of force, and a more recent sexual harassment allegation.
The Ashley Youth Detention Centre in the state's north will be shut, with two smaller centres to be built - one in the north and one in the south, Premier Peter Gutwein announced on Thursday.
Despite the best intentions of management and staff, the centre will continue to be "stigmatised and constrained" when trying to help young people, he said.
"The children at Ashley are safe and I want to be absolutely clear about that."
He said it was time for long-running speculation about the centre's future to end.
"This will be a shock for staff there," he said.
"Enough is enough, we're going to change to a new model and we're going to do that within three years."
Once a home for the state's "more difficult boys", a report to parliament this year found ongoing staff shortages had led to the use of excessive force, put workers at risk, and meant suicide and self-harm checks were limited.
A new blueprint will focus on trying to keep young people out of the justice system.
Mr Gutwein said he had spoken to a public servant who filed a complaint against a colleague after working as a clinical practice consultant at the centre in 2019.
The investigation outcome was announced in parliament this week without her getting any information first.
"Obviously this was just another piece of the puzzle in coming to the decision that what we need to do is pivot to a new model," the premier said.
He said no staff or contractors would lose their jobs, and he has spoken to unions.
The government has encouraged all survivors of historical child sexual abuse at the centre to come forward and seek support.