A total of 163 postal votes have been destroyed in Tasmania after they were irreparably damaged by a letter-opening machine, the state's electoral commission has revealed.

More than 2,300 ballot papers for the Hobart-based seat of Denison were damaged during preparation for the count on Saturday evening.

The Tasmanian Electoral Commission (TEC) said 2,175 ballot papers were repaired but 163 were damaged so badly they had to be counted as informal.

The incident has been blamed on the machine not being used properly and poor quality control.

State Electoral Commissioner Julian Type said it was not likely to impact the result.

"A range of candidates have been affected, but Liberal Party candidates disproportionately so," he said.

"As Electoral Commissioner I bear ultimate responsibility for this extensive procedural failure and I apologise unreservedly to Denison candidates and voters.

"The only uncertainty in the division of Denison is which of the four Labor candidates other than Scott Bacon will win a second seat for the Australian Labor Party."

Denison looks set to keep the same make-up of candidates, after only recording small swings against Labor and the Greens compared with the rest of the state.

With just over 70 per cent of the vote counted in the electorate, the Liberal and Labor parties should retain two seats each, while Greens MP Cassy O'Connor has held onto her spot.

A Labor candidate is set to replace retiring member Graeme Sturges.

Denison had a full ticket of Palmer United Party candidates, including former Integrity Commissioner Barbara Etter, but failed to make a mark.