TONY JONES, PRESENTER: Two of Australia's wealthiest entrepreneurs have bought a Tasmanian woodchip mill, throwing the future of the state's forest industry into doubt.

Wotif creator and Australian Greens donor Graeme Wood and Kathmandu clothing founder Jan Cameron signed the contracts to buy Gunns' Triabunna mill today.

They're paying $10 million for the operation. They say they'll continue to run it as a woodchipping facility, but for the term of the current contract.

Their long-term aim is to make Triabunna a mecca for tourism on Tasmania's east coast.

Brad Markham reports.

BRAD MARKHAM, REPORTER: Entrepreneurs Jan Cameron and Graeme Wood are now significant players in Tasmania's forest industry. The pair has bought Gunns' Triabunna woodchip mill for $10 million.

JAN CAMERON, ENTREPRENEUR: That's a very unexpected development for both of us, I think.

BRAD MARKHAM: The east coast site is among a list of assets the timber company Gunns is selling to raise cash.

JAN CAMERON: We've been fairly committed about pursuing this opportunity and we've kept the negotiations open and we've been quite persistent.

BRAD MARKHAM: The deal scuttles a plan by family-run company Aprin to buy the woodchip mill.

RON O'CONNOR, APRIN: It just ripped me up bad because I've been - you know, we been working on this pretty hard.

BRAD MARKHAM: It had conditional approval for a taxpayer loan and a secret profit-sharing arrangement with Forestry Tasmania.

It's also been revealed Aprin was prepared to pay $16 million for the mill.

BRENDAN O'CONNOR, APRIN: What we are wondering is why we weren't offered the mill under the same circumstances. If the offer was 10 to start with, we would have had the money to Greg six weeks ago.

BRAD MARKHAM: There's been a mixed reaction to the sale.

BOB BROWN, GREENS LEADER: It's a wonderful outcome. It's come from the market without government interference or backroom deals.

PETER GUTWEIN, TASMANIAN SHADOW TREASURER: This will have drastic consequences for the entire forestry sector in Tasmania. Triabunna was an integral part of the supply chain.

BRAD MARKHAM: But the owners have agreed to keep the mill operating for an unspecified transition period, which the industry says needs to be until 2027.

LARA GIDDINGS, TASMANIAN PREMIER: We will hopefully be able to work with the new owners to ensure that there is a future for the native forest industry in southern Tasmania.

JAN CAMERON: Most likely we'll tender the mill out to an operator for this period.

BRAD MARKHAM: Aprin's owners won't be applying.

RON O'CONNOR: Cut off my arm first.

BRAD MARKHAM: The site will eventually be converted into a tourism hub.

JAN CAMERON: This is definitely a long-term project for Graeme and myself. We don't have any firm ideas exactly what is going to happen.

NICK MCKIM, TASMANIAN GREENS LEADER: Triabunna now has the opportunity to grasp a future with a broader economic base.

BRAD MARKHAM: Ownership of the mill will officially change hands on Friday.

Brad Markham, Lateline.