The AFL has said the island state's entry to the competition is contingent on the construction of the $715 million stadium at Hobart's waterfront.
The project requires $240m in federal funds, which Prime Minister Anthony Albanese will announce this weekend according to multiple media reports.
Opponents have lashed a lack of consultation, claiming a new stadium is not the right priority and labelling Tasmanian Premier Jeremy Rockliff weak for not standing up to AFL demands.
Mr Albanese on Wednesday said his government had been working with Tasmanian officials on a broader plan for urban renewal at the Macquarie Point site.
"Hobart is an extraordinarily beautiful city but at the moment (the site) sits there as a bit of an eyesore - it is completely under-utilised," he told reporters.
He said using the site for recreational activity and housing would be a positive.
Tasmanian state government MP Roger Jaensch said the dream of a standalone team was getting closer by the day.
"We haven't seen any formal announcement just yet. That ball is still in the prime minister's court," he told reporters.
"We look forward to having confirmation we'll have our own team, making it a truly national competition for AFL and women's football as well."
An AFL spokesman said the federal government had been considering the Macquarie Point business case and funding was ultimately its decision.
The state Liberal government has already pledged $375 million to the stadium, which is opposed by state Labor and Tasmanian federal Liberal and independent MPs.
They have argued the money could be better spent on housing and essential services.
A plan detailed in correspondence between Tasmania's department for growth and Hobart City Council includes up to 120 apartments to house health workers.
Federal MP Andrew Wilkie, Hobart Lord Mayor Anna Reynolds and others described the plan as poorly-conceived and a random "grab-bag" of proposals.
State Labor opposition leader Rebecca White said Mr Rockliff had been too weak to stand up to the AFL.
"The priorities for Tasmanians are addressing the health, housing and cost-of-living crisis, not building a stadium in Hobart. We have two perfectly good stadiums," she said.
"(Mr Rockliff) has been held to ransom by the AFL and now the Tasmanian taxpayer is on the hook.
"There has been no consultation with the Tasmanian community. It didn't go to the last state election. It won't be something the parliament gets to see and approve."
Tasmania hosts eight AFL games a season under agreements with Hawthorn and North Melbourne to play fixtures at Launceston's University of Tasmania Stadium and Blundstone Arena in Hobart.
The state government will contribute $12 million per year over 12 years towards a team, plus $60 million for a high-performance centre.
The AFL has committed $360 million over a decade, including $90 million in game development and $33 million for player talent academies.
It will spend $15 million on the stadium, with $85 million to come from borrowings against land sale or lease for commercial uses.
Tasmania's bid for a team was originally meant to be voted on by AFL club presidents towards the end of last season.
In March 2022, then-premier Peter Gutwein announced Tasmania would pursue the "aspirational vision" of building a stadium at Hobart's waterfront.
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