Liberal Treasurer Michael Ferguson will on Thursday hand down his maiden budget after taking on the role from former premier Peter Gutwein, who unexpectedly quit politics in early April.
The funds will be allocated over the forward estimates, with $204 million to be spent this year, amid an affordable housing and rental crisis.
"All Tasmanians deserve a roof over their head. (This is) the most ambitious and comprehensive social and affordable housing program in the state's history," Construction and Housing Minister Guy Barnett said.
The money is part of a previously announced $1.5 billion pledge to build 10,000 new homes by 2032.
Rental markets in the Tasmanian cities of Hobart and Launceston are among the most stretched in the country, housing data shows, leaving many unable to secure affordable accommodation.
Mr Barnett said 1169 homes will be built this year, and meet a target of 1500 by June, 2023.
"Tasmania's new Housing Authority will be tasked with building and acquiring the homes, as well as partnering with the not-for-profit sector," Mr Barnett said.
Other budget housing initiatives will include a continued First Home Owners Grant, releasing more residential land, lifting land tax thresholds, a housing market re-entry program and stamp duty concessions.
More than $36 million per year will be spent on specialist homelessness services, including shelters.
In other announcements, some $150 million over four years will go towards upgrading the health system's digital infrastructure to enable better sharing of patient information and service accessibility.
More than $36 million over four years will go towards child safety measures in response to an independent review of the education department's handling of historical abuse allegations.
Tasmania is holding a commission of inquiry into state government handling of child sex abuse allegations which has heard complaints have fallen on deaf ears.
Tourism Tasmania will also receive a $10 million boost to accelerate the industry's pandemic recovery.
Road and bridge funding will rise from $2 billion to $2.7 billion across the forward estimates.
It includes $786 million in joint state and federal funding for a long-awaited new Bridgewater Bridge north of Hobart which is expected to be in operation by the end of 2024.
Updated figures released in February show Tasmania's finances have improved.
An expected deficit of $690 million in 2021/22 has been reduced to $605 million, with revenue increasing partly due to greater GST receipts.Â
The 2021/22 budget papers predicted a return to surplus, of $39 million, in 2023/24.
The latest Deloitte Access Economics Business Outlook, released in April, rated Tasmania's economy as the best performing of any state or territory for the ninth quarter in a row.
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