A Tasmanian council has voted in favour of handing back a parcel of public land to Tasmanian Aboriginal people.

Passed by Hobart City Council this week, the in-principle support backs the return of nearly five hectares of land at Queens Domain, north-east of the Hobart CBD, to Tasmanian Aboriginal people via the Aboriginal Land Council of Tasmania (ALCT).

It comes after Hobart City Council last year identified the area as a possible site for an Aboriginal-owned culture centre to be operated by the Tasmanian Aboriginal Centre (TAC).

Lord mayor Anna Reynolds, said the motion, which passed nine votes to three, had "strong support around the table".

"Today's decision is a significant milestone and the first step in returning land to the Aboriginal community to allow for the recognition and celebration of Tasmania's Aboriginal culture and connection to country in the heart of an Australian capital city," she said, The Mercury reports.

"This is a nationally and locally significant indication of the Council's support for a land handback - the first in Tasmania for two decades.

"There is still substantial work ahead and any future land transfer would require a separate Council decision, but today's outcome reflects a willingness to genuinely explore an opportunity of historic significance for our city and state.

"With good will from all parties, my hope is that we can turn this strong intention into a reality."

If approved the land, located off Domain Road, would become Tasmania's first Aboriginal land handback in more than two decades, as well as becoming the first time a capital city returned land to Indigenous peoples.

ALCT general manager, Sarah Wilcox, said the handback would be welcomed by Aboriginal people.

"This is a really unique opportunity to think about establishing a cultural centre which can serve as a keeping place," she told the ABC.

"Currently in the Aboriginal community, we have absolutely nowhere to look after our sacred cultural items.

"Since 1995, the return of land has enabled meaningful cultural, social and economic outcomes for our people; outcomes that are only possible through strong, respectful relationships with government and the broader Tasmanian community."

The motion was supported by Ben Lohberger, Louise Bloomfield, Zelinda Sherlock, Ryan Posselt, John Kelly, Bill Harvey and lord mayor Anna Reynolds, with Louise Elliot, Will Coats and Marti Zucco opposing it.

At Monday's meeting Mr Lohberger praised the decision as "one of the most important things we've done in this entire term".

"There are times when politics and personalities sometimes become the focus of the decision-making, but this decision is measured in something far greater," he said, The Mercury reports.

"It is measured trust, it is measured reconciliation, and it is measured in our willingness to acknowledge the enduring connection of the Tasmanian Aboriginal people to our country."

Ms Elliot took issue with the proposal having been drafted without public consultation.

"I strongly believe the community should have been asked their views before the Council gave the green light for a long and expensive process to begin," she said, Pulse Tasmania reports.

The successful motion means the council's CEO, Michael Stretton, can begin investigating details of the proposal, including title issues for subdivision, legal implications, as well all planning, heritage, environmental and land tenure advice.

At Monday's meeting Ms Reynolds said there would be a substantial consultation process before any handback was initiated.

"It's been a useful discussion and I think what I'm hearing is a lot of general support for this really important proposal," she said.

"I am concerned about how long this process will take.

"At the start of any journey you actually have to decide you're going to take that first step, and that requires us as the democratically elected leaders of the community, make an in principle decision."

The last handback of public land to Aboriginal people in Tasmania took place in 2005 when Cape Barren Island and Clarke Island were returned to the ALCT.