Researchers at the University of Tasmania analysed more than 1200 unique reported observational records from 1910 onwards and mapped the marsupial's decline.
The last thylacine in captivity perished at Beaumaris Zoo in Hobart in 1936, just months after the species had been granted protected status.
Researchers assigned a probability to each reported thylacine observation and then analysed the data as a whole.
They found the species' distribution shrank rapidly after bounties were provided for their skins from 1888 to 1909.
"The most likely location of the last surviving sub-population was in the southwestern region," study leader and professor of environment sustainability, Barry Brook, said.
"The results showed that extinction likely occurred within four decades after the last capture, so around the 1940s to 1970s.
"We found, through further analysis, that extinction might have been as recent as the late 1980s to early 2000s."
Prof Brook said there remained a "very small" but highly unlikely chance the thylacine still lived in the remote southwest wilderness.
From 1938, all observations were unverified sightings or reported but unconfirmed kills and captures.
They came from experienced trappers through to the "largely thylacine-naive" public, the study said.
It noted the biggest difficulty in trying to decide whether sightings were correct or false was figuring out whether there was any bias in their reporting.
"In the years following the death of the last captive thylacine, when zoos sought new specimens (offering substantial remuneration) and yet none could be secured, interest in proving the species' ongoing existence steadily rose," the authors said.
" ... there was a greater incentive to falsely report sightings (for notoriety), or even a subconscious desire to want to see a live thylacine, leading to inflated misidentification errors."
The study said without the reassurance of a physical record, the time when true sightings became incorrect sightings was shrouded in a "fog of war".
Co-author Dr Stephen Sleightholme from the International Thylacine Specimen Database said the species has captivated the imagination for decades.
"Our study shows that there is still much to learn about its history and ecology," he said.
The research was published in the journal Science of the Total Environment.
