It is unclear how much compensation the Malaysian-owned Ta Ann Tasmania will receive under the forest peace deal.
The veneer producer has confirmed its contracted wood supply will be cut by almost 40 per cent to about 160,000 cubic metres a year, if the agreement passes the Upper House.
Executive director Evan Rolley says the company has been guaranteed compensation for the shortfall in its contracts.
The State Opposition estimates it will cost taxpayers $50 million in compensation.
The Premier, Lara Giddings, says the State and Commonwealth are still negotiating an amount.
"It does take time to work through the details and announce then what is finally agreed and where we're going, but I can assure you Tasmanians will be told what arrangements are being put in place," she said.
Mr Rolley will not speculate on the compensation figure.
"This company invested $84 million in two new state-of-the-art plants in 2006 based on wood supply agreements." "Our clear understanding is those contracts will be honoured and if not renegotiated and we'll be treated fairly in terms of any compensation in the same way as any hardwood sawmillers." Greens leader Nick McKim has indicated the Greens would support the payout.
"A contract is a contract and obviously to reduce volumes there'll need to be a renegotiated contract and that's what the Greens have been calling for for a long period of time," he said.
Ta Ann says it will overhaul its business and source more timber from private forests to maintain production.
More compo A business employing Tasmanians with disabilities may also seek compensation if it cannot get timber under the forestry peace deal.
Oak Tasmania employs 41 people, including 33 with special needs, and processes 6,000-7,000 cubic metres of native forest timber a year.
Chief executive John Panton says he is concerned the business will have to close without guaranteed timber supply.
He says he may need at least $10 million in compensation from the State Government to restructure the business, re-train staff and purchase new equipment.
"Obviously we would go down the track of redeployment and look at how we could restructure to maintain our business but the probability of closing if we can't get the resource available to us, that's a real possibility," he said.