The Tasmanian Liberal Party has come under fire after it approved a $13 million forestry grant during its final days in power.

A deal was struck which will provide Victorian timber company Hermal Group with $13 million as well as a $30 million loan to build a new hardwood mill in the north-western town of Burnie.

The mill is expected to be operational by 2020 and create around 360 jobs during both construction and operation.