A former federal MP who held Tasmania's largest electorate is headed to a new island, and this time he will be running the whole show.

Eric Hutchinson has been appointed administrator of Norfolk Island for two years, and will reside in the island's Government House.

Mr Hutchinson was unseated in last year's federal election after serving three years in Lyons.

He then took up a highly paid position as an advisor to Senate President Stephen Parry.

Senator Parry's office said Mr Hutchinson is yet to formally resign, and it's unclear if his specific role will be replaced.

Mr Hutchinson will succeed Gary Hardgrave in the role, which is estimated to pay upwards of $200,000, from April 1.

"I'm looking forward to the challenge that this role will bring," Mr Hutchinson said.

Liberal Eric Hutchinson was ousted after one term in the federal seat of Lyons. ( ABC News: Laura Beavis )

"It will be a difficult role but there are enormous opportunities, and I hope the skills I have in business and agriculture, and from my time in Parliament, will help me."

Mr Hutchinson, 51, has a personal link to the island, an Australian external territory.

"I have a relative buried on Norfolk Island," he said.

"He was the son of William Able, who was an involuntary resident of Norfolk Island who went there in 1796."

Mr Hutchinson said he was fascinated by the island's unique history.

"The first period was between 1788 and 1814, and all of those settlers moved to, as it was then, Van Diemen's Land," he said.

"It gained a reputation as a brutal penal colony, then in 1856 the people from the Pitcairn Islands were given the land by Queen Victoria."

Mr Hutchinson said governing the island would have its challenges.

"I want to be somebody they can trust and can work with them constructively to deliver on the aspirations they have in their quite unique home," he said.

"There are differences of opinion, and that's going to present challenges but I'm determined to do, as I have done in former careers, to listen to people and be open."

Mr Hutchinson said he was approached about the role.

His family will stay in Launceston.

"They will spend some time on the island but my wife has a business and I've got two boys in high school," he said.