Forestry Tasmania will be renamed and a further 35 jobs will be cut under a revamp announced by the State Government.

It will remain a government business, but will be downsized and renamed Sustainable Timber Tasmania.

Resources Minister Guy Barnett told Parliament 35 positions would be axed as part of the changes.

The challenges are substantial, this will not be easy but we have a lot going for us," he said

The state-owned company has reported a loss of $67 million.

Mr Barnett said the job losses were deeply regrettable, but inevitable.

"While Forestry Tasmania has reduced costs over recent years and significantly reduced employee numbers, there is more to do before the business is fit for purpose in its new operating environment," he said.

The plan includes selling Forestry Tasmania's plantations and offloading some functions to the private sector.

Opposition Leader Bryan Green said under the Government's plan there would be less timber available to industry.

"Forestry Tasmania will provide about 97,000 cubic metres and the rest will come from private forests," he said.

"That, to me, is a real cut in the actual volume available to industry.

"That's not what the Government said they would do."

Move to unlock reserved forests by 2018

The Government is pushing ahead with its plan to open up reserved forests to logging two years earlier than permitted under its own laws.

Mr Barnett told Parliament the Government would table legislation next year to open up 400,000 hectares of forest to logging by July 2018.

Under the Government's current forestry legislation, the land, which includes area in the Tarkine, was subject to a moratorium until 2020.

Mr Barnett described it as a "wood bank" and said it was necessary to log it to get Forestry Tasmania back on sustainable footing.

"We need to find a lower cost supply of timber," Mr Barnett said.

"At the heart of the problem is the board's advice that more than a quarter of its high-quality saw log costs more to produce than it is to recover from current prices.

"That is costing money and the bill ends up with the taxpayer — it can't continue."

Greens leader Cassy O'Connor said the plan would send Tasmania back to forest conflicts.

"This is all about the Liberals wanting to pick a fight over forests in the lead up to the next election," she said.

"They think a bit of conflict over forests is just the ticket.

"Those are forests that were independently verified as being high conservation value."

Ms O'Connor was booted out of Parliament by Speaker Elise Archer as Mr Barnett spoke.