Hobart City Council has voted to remove a statue of a contentious colonial figure from the city's centre.

The monument of Tasmanian colonial figure William Crowther, which resides in central Hobart's Franklin Square will be taken down after Council voted in favour of it's removal.

The monument of Crowther, a former Tasmanian Premier and surgeon was erected in 1889 to acknowledge his "political and professional service to the colony", however the statue has been heavily criticised by the Tasmanian Aboriginal community for decades.

The criticism is due to Crowther breaking in to the Hobart morgue in 1869 to decapitate the skull from a deceased Aboriginal man, William Lanne, replacing it with another and sending Lanne's to the Royal College of Surgeons in London in the interest of science.

These actions lead to Crowther's suspension from his position at the Hobart General Hospital, however he was briefly appointed Premier of Tasmania less than a decade later.

Upon the announcement of the decision there were scenes of celebration outside of the council's chambers from members and supporters of the Tasmanian Aboriginal community.

They included Tasmanian Aboriginal Corporation campaign manager Nala Mansell, who said the council's decision was an acknowledgement of colonial truth-telling.

"Today the Hobart City Council has voted seven to four to become the first state in this whole country to acknowledge the true history of our people," she said.

"...to acknowledge hurt and trauma and to acknowledge the dispossession, the racism and oppression that our people have fought for for 220 years."

"Today Tasmania will lead the whole country in the truth-telling of the true Aboriginal history in this country."

In announcing the decision, City of Hobart Lord Mayor Anna Reynolds said the decision to remove the monument of Crowther represented a more accurate reflection of the city's colonial past.

"This decision is the city saying that we want to prioritise truth-telling in our most prominent city square," she said.

"Tonight's vote says that we believe as a council, and as a city that it's time to celebrate and acknowledge a more honest representation of our past."

"It's the beginning of an important new chapter in our history."

The decision was made following a two-year staged project by the City of Hobart; Crowther Reinterpreted, in which temporary artworks were installed at the site of the statue and followed by extensive community engagement and consultation to explore a permanent response.

Councillor Zelinda Sherlock, the Chair of the City of Hobart's Community, Culture and Events Committee said the current cultural climate demanded action on Crowther's monument.

"This is the zeitgeist of our times, whether it be globally, nationally or locally," she said.

"The zeitgeist of our times demands that we talk about and challenge the actions of our history."

Ms Sherlock said the council's decision was reflective of the local community's views, and the monument's removal would allow for greater dialogue about Hobart's colonial history.

"It's important to note that within our City of Hobart Vision that the community asks us to be bold and brave and this is one of those opportunities to listen and respond to our community," she said.

"By removing the statue, we don't take away history, if anything it encourages more open discussion about it."

The decision by council will still require further planning and heritage approval subject to assessment of local and state heritage processes.