The Federal Government has put up $56 million for a second electricity interconnector between Tasmania and the mainland.

The Prime Minister announced the funding as part of the Hobart City Deal on the weekend.

“Our government will commit $56 million this year to fast-track the development of a second electricity transmission interconnector, the Marinus Link, to unlock Tasmania's battery of the nation,” he said.

The interconnectors should deliver up to 2,500 megawatts of renewable hydro power to Tasmania and Victoria, with 16 gigawatt hours of storage.

Mr Morrison said the scheme will help reduce emissions.

“Ultimately Marinus Link and battery of the nation mean lower prices, greater energy security, particularly for Tasmania and Victoria, but as well as other mainland states, while helping Australia achieve its 2030 emissions reduction target,” he said.

Construction of the link should generate 500 to 1000 jobs in Tasmania ,and between 900 and 1500 in regional Victoria, with the project expected to be completed by 2025.