A new hydrogen hub will be developed in northern Tasmania, with more than 45,000 tonnes of renewable energy to be produced at the site each year.
The federal government on Thursday announced their $70 million investment into the Bell Bay project, which is expected to generate about 740 jobs in the region.
The Tasmanian government and the private sector have also contributed to the new hub, with overall investments totalling $300 million.
"Investing in an Australian renewable hydrogen industry is investing in Australia's future to become a renewable energy superpower," federal Energy Minister Chris Bowen said.
"Bell Bay is a production and export powerhouse, backed by 100 per cent renewable electricity.
"This hub will provide jobs, support new manufacturing and spur investment in regional Australia as the world decarbonises."
The hub is expected to produce 45,000 tonnes of renewable hydrogen annually, which is enough to fuel more than 2200 heavy vehicles for a year.
The project will start this year, with the hub expected to be up and running by 2028.
"Green hydrogen and future fuels production is a massive opportunity for us, and we are determined to support its development here," Tasmanian Premier Jeremy Rockliff said.
"Tasmania is well-placed to be an important player as the world pushes hard to decarbonise."
The federal government is also investing in hydrogen hubs in regional centres like Kwinana and the Pilbara in Western Australia, and Gladstone and Townsville in Queensland.
The World Wide Fund for Nature-Australia has welcomed the government's latest investment.
"Regional communities can continue to drive Australia's energy and manufacturing industries as the world decarbonises," chief executive Dermot O'Gorman said.
"Today's announcement is a big step towards making Bell Bay a globally important centre for renewable hydrogen and renewable-powered manufacturing."
