Labor's Jo Siejka has won the Pembroke by-election, leaving the Hodgman Liberal Government with just one seat in the Tasmanian Upper House.

Key points: Liberals candidate James Walker conceded defeat in Pembroke election

Liberals candidate James Walker conceded defeat in Pembroke election By-election was called after former Liberal government minister's resignation

By-election was called after former Liberal government minister's resignation Jo Siejka believes she benefitted from staying out of controversy

With preferences distributed, Ms Siejka ended comfortably ahead of the Liberals' James Walker and highly-favoured independent Doug Chipman.

It was a significant result because the by-election was triggered by the illness and subsequent resignation of former Liberal government minister Vanessa Goodwin.

That means the Liberals have now been reduced to just one seat in the 15-seat Upper House, while Labor has increased its representation to four members.

Mr Walker called Ms Siejka to concede this afternoon.

James Walker tried to distance himself from the Liberal Party's negative campaign. ( ABC News: Rhiana Whitson )

The electoral commission will release final figures during the week but Ms Seijka attracted about 32 per cent of first-preference votes, Mr Walker about 25 per cent and Mr Chipman about 20 per cent.

After preferences were distributed Ms Siejka was the clear winner against both opponents.

Before the preferences were distributed the Premier Will Hodgman said a win for the Opposition would be bad news.

"If Labor wins it is worst-case scenario because the last thing Tasmania needs in my view is a larger block in the Upper House," he said.

Campaign dominated by ageism controversy

The campaign was dominated by the Liberals attack on the age of Mr Chipman, also Clarence Mayor, when it was suggested the 71-year-old was too old to serve in the Upper House.

The move was labelled "ageist" and prompted the Council on the Ageing to write to the premier expressing disappointment.

Ms Siejka said she benefited from staying out of the controversy.

"I wasn't engaging in any of that so I think it probably did me favours, people liked that," she said.

"I think that we've played a really strong game and I think that we've played a solutions-focused game."

Doug Chipman was mocked for living in a lifestyle village. ( ABC News: Amy Hall )

The age attack was one of a series of controversies in the lead-up to the by-election.

Mr Hodgman denied the campaign had been mishandled.

"No, this campaign was very strongly run by an excellent candidate who has performed very well," he said.

The architect of the failed campaign, Liberal state director Sam McQuestin, defended the party's efforts on social media.

"While we may just fall short, our result last night frankly exceeds our expectations," he said.

"The fact is, we needed to finish ahead of the Mayor of Clarence on primaries to have any chance of winning, so to that end, the campaign tactics have achieved their aim."

'Miserable time' ahead for Liberals if re-elected in March

Political analyst Kevin Bonham said attacks on Mr Chipman by the Liberal Party ultimately helped Labor record a solid victory.

"It's quite a convincing win ... It seems the Liberals' attack on Doug Chipman has been effective on damaging Chipman and perhaps bringing them a few more primary votes, but it also just made it easier for Labor to win the seat," Mr Bonham said.

"I was a bit surprised that the Liberals did manage to finish ahead of Chipman. I thought that was fairly unlikely.

"I thought Chipman would get a higher vote in general."

Mr Bonham characterised Ms Siejka's victory as a "very big win over the Liberal Party" in the final results.

He added that he believed other independent candidates performances were "weak" and that the Greens were not very good either.

With four Labor MPs and 10 independent MPs in the Upper House, Mr Bonham said it would be interesting to see the result of next year's election.

"If the Hodgman Government is re-elected in March it's probably going to have a miserable time getting anything through even more so than in its current term," he said.

"On the other hand, if a Labor government is elected in March it will probably have a workable Upper House."