The decision has left palawa woman Nala Mansell overwhelmed with emotion and showed the state was ready to acknowledge its true Aboriginal history.

Former Tasmanian premier William Crowther decapitated and stole the head of deceased Aboriginal man William Lanne in 1869.

A statue of Mr Crowther sits in Hobart's Franklin Square.

On Monday, the Hobart City Council voted seven to four for the statue's partial removal.

The council unanimously voted to commission a new interpretive or sculptural element to accompany the Crowther plinth, in consultation with stakeholders.

Ms Mansell, the Tasmanian Aboriginal Centre's campaign coordinator, said her community was "thrilled" by the decision.

"It's a great step forward for Aboriginal and non Aboriginal people in Tasmania," she said.

"For too long, we have had to endure the racist statue of William Crowther, which celebrates the grave robbing and dehabitation of William Lanne based solely on his race and based solely on the fact of the claim that Tasmanian Aborigines no longer exist."

Ms Mansell said her community had fought for decades and had never considered that non-Aboriginal elected leaders would have "the courage to stand up for what's right and acknowledge the wrongs of the past".

"It's just such a great day to be able to celebrate the fact that Tasmania is leading the way in this whole country when it comes to removing statues that glorify people who committed such racist and barbaric actions against Aboriginal people," she said.

The decision follows a unanimous vote by the council's community, culture and event committee to remove the statue earlier this month.

The removal was not without opposition.

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Alderman Simon Behrakis said the state's history needed to be preserved "warts and all".

He said a history that made us uncomfortable was one we could learn from.

"We don't learn anything from history if it's hidden away," he said.

Alderman Marti Zucco moved for an elector poll to gauge how the Hobart community felt about the issue.

"We can actually see what the community of Hobart really, really wants and we expand consultation to organisations or people that were not part of the original consultation process," he said.

Alderman Bill Harvey said the consultation had been a thorough process, and there was no need to delay it further.

"There's no need to defer. There's no need to obfuscate. There's no need to come up with tactics to delay a decision tonight," he said.

The council unanimously voted to develop a Monuments Policy for future additions and removals to the City's collection.