The Spirit of Tasmania will be moving its Victorian operations from Melbourne to a new port at Geelong as it looks to expand services.
Operator TT-Line announced on Thursday the Bass Strait ferry service will shift from Port Melbourne to a yet-to-be-built 12-hectare site at Corio Quay.
A date for the move hasn't been set, with TT-Line holding a lease to use Station Pier in Port Melbourne until November 2022.
The new site at Geelong will include a purpose-built passenger terminal building, marshalling area for 600 cars, more efficient vehicle check in and a pet exercise area.
The move will help ease congestion and provide room for TT-Line to expand its freight services, chairman Mike Grainger said in a statement.
Mr Grainger said passengers had cited problems with the current port including boarding queues of up to two-and-a-half hours.
"Our operations are often negatively impacted by significant congestion in the greater Port of Melbourne area, particularly when cruise ships are in port," he said.
TT-Line expects the Geelong shift will lead to an increase in passengers sailing to Tasmania from other states and regional Victoria.
Almost 447,000 passengers made the Bass Strait crossing in 2018/19 on 867 sailings.
TT-Line will maintain its "last to leave, first to arrive" freight service, Mr Grainger added.
Without detailing specifics, Tasmanian Infrastructure and Transport Minister Michael Ferguson said the deal was an "excellent financial outcome" for the company and its customers.
"TT-Line would otherwise have seen significant cost increases at Station Pier, which would have been passed onto freight customers and passengers," he said.
The Geelong port is about one hour's drive west of the Melbourne CBD.
Australian Associated Press