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A Hobart-based team will feature in the NBL in 2021/22, Tasmania's first in the competition in a quarter century.

Tasmania will have a team in the NBL for the first time in 25 years after the league finalised its agreement with the state government for its participation licence in the 2021/2022 season.

The agreement includes a home for the team at the Derwent Entertainment Centre, which will receive a $68.5 million Tasmanian Government-backed upgrade.

An in-principle agreement had been reached in late February, with the deal officially signed off on Thursday.

The Hobart Devils last featured in the national basketball competition in 1996 where they finished 12th of 14 teams.

NBL owner and executive chairman Larry Kestelman said it was great news for the NBL and "the people of Tasmania who have showed amazing passion to help bring this to life."

"The final agreement means we can start immediately on the next steps for the planning and upgrade of the DEC in preparation for a Tasmanian team to take to the court for the start of the 2021-22 season."