Shipbuilder Austal confirmed on Wednesday it will have a total transformation as it discontinues its Tasmanian shipyard operations and terminates 116 employees.

In a statement released today, the Western Australian company said it will cut more jobs over the next four months.

Andrew Bellamy, Austal's Director of Sales and Australian Operations, released a statement that there is now a strong demand for smaller ships which can operate efficiently at its West Australian shipyard.

"Based on Austal's current assessment of the global market, the forecast demand for smaller passenger ferries and small patrol boats can be fully services out of the Henderson facilities in Western Australia."

Mr. Bellamy said the transition is an ongoing effort to improve the level of efficiency and performance of Austal's operations. However, its changes will result in a reduction of its Australian workforce.

The Margate shipyard will close at the end of its current project.

Austal will formally hold a media conference later in the day.

Austal's operations are located at Henderson in West Australia. It designs and manufacture high-performance aluminum vessels, particularly fast ferries and luxury yachts.

Austal's share trade today was at 2.180 cents to 0.91 per cent. It closed yesterday at 2.20 cents at 0.46 per cent.