Peter Gutwein, the island state's premier, has put contract negotiations with the Hawks and North Melbourne on hold until the league outlines its plans for a stand-alone side.

The Melbourne clubs' deal to play four home games each in Tasmania expires at the end of 2021.

"I agree with the premier, we need to get some direction from the AFL, whatever that is," Kennett told ABC Radio on Friday.

"If it turns out we're not going to be in Tasmania, where are we going to be next year?

"We've got to start preparing for that now. We've got to look at all the options as well."

Gutwein, who declared publicly several weeks ago that the Hawthorn and North Melbourne negotiations were on hold, recently sent a letter to AFL CEO Gillon McLachlan outlining his ultimatum.

He expects a response next week.

"It's time for the AFL to exactly explain their view on where we stand," Gutwein said.

He said there were "plenty of options" if the AFL said no to a Tasmanian side, but wouldn't elaborate further.

A taskforce commissioned by the state government has found a team stacks up financially and recommended it enter the AFL by 2025.

Kennett, however, questioned whether the AFL has the funds after the league's books took a hit due to coronavirus.

"My heart says yes to a Tasmanian team at some stage. My economic mind says the last thing I want is a Tasmanian team that's going to fail," he said.

"We're not talking about a Tasmanian team today but in three or five years time. Will we be in a position? Will there be 18 clubs?"

Gutwein said Kennett's comments should be taken with a "pinch of salt".

"He's conflicted because he is the chairman of a club that benefits to the tune of around $4 million (from the deal with Tasmania) and he'd like to see that continue," he said.

"What I'll do is wait until we receive the response back from the AFL about what they see as the process moving forward."

Australian Associated Press