Tassal has backed away from its plan to dump treated wastewater extracted from its Macquarie Harbour pens back into the harbour.

In October, the Environment Protection Agency (EPA) was assessing a proposal from Tassal to pump liquid waste water inside the harbour's entrance over a six-month period.

At the time, EPA chief Wes Ford said if the appropriate standards were met he would allow Tassal to discharge the water on an outgoing tide.

But on Monday, Tassal announced "following extensive community and stakeholder consultation" it had changed plans, with TasWater to manage Tassal's wastewater under a "trade waste" agreement.

Instead of pouring the wastewater back into the harbour, Tassal will be paying TasWater to dispose of it for them.

Environment Minister Elise Archer, who had objected to Tassal's former plan, welcomed the turnaround.

"I welcome Tassal's decision not to proceed with their application to pump treated waste into Macquarie Harbour," she said.

"I had made it clear that I was not comfortable with the previous proposal and that it was outside of community expectations.

Environment Tasmania welcomed the announcement, but are wary of the new plan. ( Supplied: Tassal )

"I am very pleased Tassal has listened to my concerns and that of the community, and come up with an alternative proposal."

Ms Archer said the TasWater deal should "alleviate the concerns of environmentalists and the community, and one that I'm sure will be welcomed by all stakeholders".

Wastewater to be dispersed into Bass Strait

In a statement, TasWater said it had entered into a "commercial trade waste arrangement for a period of six months over the 2017-18 harvesting season".

"This is similar to many other TasWater trade waste arrangements," the statement read.

"This arrangement involves the receipt of filtrate water which consists mainly of sea water with some residual nutrients, the end product of a solids removal process which TasWater has no involvement in."

TasWater said "around two tanker loads of filtrate water will be received at TasWater's Pardoe Sewage Treatment Plant (STP) near Devonport each day".

"The filtrate will bypass the STP, pumped directly into the ocean outfall pipe at Pardoe which disperses more than a kilometre offshore into the turbulent waters of Bass Strait, providing a good mixing zone."

TasWater said as the filtrate was "already chlorinated", further treatment of it "would not provide any benefit and its salinity [comparable to sea water] may disrupt the biology of the treatment process of the Pardoe plant".

TasWater said it had "engaged an independent environmental consultant to assess the proposal, demonstrating any environmental impact will be limited".

It added there had been "been extensive monitoring of the outfall since 1998" and TasWater would "continue to monitor the outfall to detect any changes".

Environment group happy, but questions linger

Laura Kelly from Environment Tasmania also welcomed the decision, applauding those in the local community who opposed the former plan.

"Congratulations to West Coast locals for standing up and demanding that Tassal's waste isn't dumped back into their harbour," she said.

However, Ms Kelly flagged concerns over the antibiotic content of the wastewater and the possible presence of viruses.

"The scant details Tassal has released show that the content of their waste breaches State Government pollution limits for ammonia, nitrogen and biological oxygen demand, and TasWater have failed to explain why they have gone back on their earlier concerns about the waste's high salinity content," she said.

In a statement, Mr Ford said the "EPA has been in regular discussions with Tassal" about the management of waste from its Macquarie Harbour fish pens since before approval was granted.

"Currently, liquid fish farm water has been disposed of to George Town wastewater treatment plant (WWTP) via George Town Seafoods (GTS) with solid waste being disposed of at an authorised waste management facility," the statement said.

"Tassal has not submitted a final proposal for discharging the treated waste water into Macquarie Harbour, and is unlikely to do so while it is able to discharge the treated waste water via a TasWater facility."