Two species of handfish only found in Tasmania have been listed as endangered under the state's Threatened Species Protection Act.

The red handfish (Thymichthys politus) and Ziebell's handfish (Brachiopsilus ziebelli) were added to the list by Environment Minister Matthew Groom.

"The decision was based on advice provided by the Tasmanian independent threatened species Scientific Advisory Committee," he said.

The spotted handfish has already been listed as endangered by Tasmania and the Commonwealth.

The red and Ziebell's were added because their populations are severely fragmented, their habitat is shrinking and the number of mature individuals are in continuing decline.

There are 14 species of handfish, which have distinct hand-like fins they use to walk on the sea floor in preference to swimming.

The red handfish is found in Fredrick Henry Bay, east of Hobart.

Sightings of Ziebell's handfish have been recorded in waters off eastern and southern Tasmania, although its current distribution is unknown.

The red handfish is already classified under Commonwealth legislation as critically endangered and the Ziebell's handfish is listed as vulnerable.

Peter McGlone from the Tasmanian Conservation Trust said while the move was "belated", it was welcome.

"The State Government is finally giving them the proper recognition," he said.

"It has a responsibility to not just ensure that developments are assessed that may impact these species but to actually take positive action to try to conserve these species."

Councils must consider development impacts on fish

A recovery plan for three handfish species, including Ziebell's (pictured), has been approved. ( Supplied: Andrew Maver )

Mr McGlone said listing the species as endangered under state law, in addition to the Commonwealth listing, was vital.

"It will mean a lot in terms of councils assessing smaller scale developments that could to lead to pollution and impacting the fish," he said.

"Councils at the moment aren't required to consider the federal legislation.

"Listing under the state legislation requires them to actually make those assessments."

Mr McGlone said funding was needed to research where the fish are and determine how many are left.

"Handfish desperately need resources and we need to make sure we know what is happening to them," he said.

Mr Groom said a handfish recovery plan for three species — spotted, red and Ziebell's — was approved in December last year.

"Governments, researchers from CSIRO, the University of Tasmania and the University of Sydney, as well as experts from private aquaria and aquaculture, and NRM South have collaborated closely on undertaking species surveys, trialling habitat restoration methods, and developing proposals for genetic analysis and captive breeding," he said.

"This work has focused on the spotted handfish, with the hope that the work done on this species can be applied to the red and Ziebell's handfish in the future."