Plans are afoot to return the much-loved steam ship Cartela to the River Derwent through an ambitious project to restore it to its former glory.

The 106-year-old ship is now owned in full by the Steam Ship Cartela Trust.

In the coming months it will be put into dry dock at Franklin so repairs can be made to its hull timbers.

It is hoped the $5 million project, which is still reliant on funding, will return Cartela to the Derwent in four years.

The trust has purchased a large barge from Sydney to be used as a floating dry dock.

Project manager Ross James said the former river ferry Goliath would be sunk and put under Cartela, which would then be raised so water could drain out.

Cartela was built in 1912 and designed as a cargo and passenger ship. ( Supplied )

The operation wasn't without risks, he told Chris Wisbey on ABC Radio Hobart.

"The problem for timber vessels is the timber swells when it's wet and shrinks when it's dry.

"So we've got to manage the rate at which the moisture leaves the hull timbers.

"We believe if we can manage the rate of the initial drying out then problems can be avoided."

Restoration work underway

Cartela has spent the past few years alongside the wharf at Franklin and Mr James said it remained in remarkable condition.

"She's in amazingly good condition. She's probably the only boat in the world that has over 100 years of continuous use," he said.

"There's roundabout 5 per cent of the planking that needs replacement, that's an extraordinarily small amount."

About 30 per cent of the vessel's framing needs replacing.

Mr James said it might appear to the public that restoration progress had stagnated over recent years but work had been underway.

"We're paddling furiously below the surface but no-one can see any results," he said.

"We're very close now to turning that into work you can see on the vessel itself."

Cartela, pictured on the Derwent in 1914, can carry up to 300 passengers. ( Supplied: Cartela Trust )

Original steam engine to be returned

Mr James said Cartela's original steam engine had almost been restored and would be returned to the vessel.

It was taken out in 1958 and replaced with a diesel engine.

He said the trust had tracked down the steam engine, which had been given to the Tech as a training tool and later ended up in a paddock.

"We bought it back and it's now being restored," Mr James said.

"We're making it better than new so it'll be ready for another 100 years of operations."

'Australia's most important maritime heritage object'

Built in 1912 in Battery Point, Cartela is 123 feet long (37.5 metres) and was designed as a cargo and passenger ship.

It can carry up to 300 passengers and in recent years was used for cruises around Hobart.

Mr James said the vessel had never been laid up.

"There hasn't been a time in her life where she's been laid up; she's had a continuous, hard, productive life."

Cartela is held in fond regard by many in the community. ( Supplied: SteamShip Cartela Trust )

Cartela has a colourful history, and has even been the subject of a royal commission after a collision with another steamboat.

It's also been involved in High Court challenges after towing a 3,000-tonne ship from South Bruny Island to Sandy Bay.

The case was used as a precedent to determine the difference between salvage and towage.

"I would claim the Cartela is Australia's most important maritime heritage object," Mr James said.

"She is held in fond regard by a huge percentage of the community."

Mr James wants Cartela to go back to work on the Derwent and run regular cruises to New Norfolk and Franklin.

"She will remain in the community that loves her," he said.