Tassal says it will not dump treated wastewater from its Macquarie Harbour pens back into the harbour.

The salmon producer had lodged plans with Tasmania’s EPA to pump liquid waste water inside the harbour's entrance over a six-month period.

The EPA had indicated it would allow Tassal to discharge the water on an outgoing tide only.

Tassal has now announced that “following extensive community and stakeholder consultation” its plans have changed.

TasWater will now manage Tassal's wastewater under a “trade waste” agreement.

Instead of pouring it back into the harbour, Tassal will now pay TasWater to dispose of it for them.

Environment Minister Elise Archer welcomed the turnaround.

“I welcome Tassal's decision not to proceed with their application to pump treated waste into Macquarie Harbour,” she said.

“I had made it clear that I was not comfortable with the previous proposal and that it was outside of community expectations.

“I am very pleased Tassal has listened to my concerns and that of the community, and come up with an alternative proposal.”

Ms Archer said the deal with TasWater deal should “alleviate the concerns of environmentalists and the community, and one that I'm sure will be welcomed by all stakeholders”.