Legislation that will see the creation of a single water and sewerage body has passed through the Tasmanian Legislative Council.


"It has always been the Government's preference to have a single authority and there is strong evidence, including from the chair of the three bodies, that a merger would result in savings in the order of $5 million a year,” Finance Minister Scott Bacon said.


"There is also strong support in the community for any reform that results in greater efficiencies."


Mr Bacon said the model was the result of lengthy collaborative discussions betweenState and Local Government.


The Bill will transfer the assets, liabilities and employees of the existing water and sewerage businesses - Ben Lomond Water, Cradle Mountain Water, Southern Water and Onstream - to the new corporation.


"The move will allow for statewide infrastructure planning, streamlined governance arrangements, consistency in service delivery and potential cost savings," Mr Bacon said.


"Local councils will retain full control and income from their water and sewerage assets."


The target start date for the new corporation to commence full operations is 1 July 2013.