THERE won't be any undercutting of existing digital businesses by the Noosa Council's new digital hub under construction at Peregian Beach.

Deputy Mayor Frank Wilkie, who is based in Peregian, answered "a concern there that a council-built facility will be in some way in competition with or undercutting similar facilities”.

"One of the parameters of this project is that it operates in cooperation with and as complement to co-working spaces,” Councillor Wilkie said.

He said as part of the state grant for $1 million, the eventual digital hub operator would be chosen by a tender process.

"We don't know the full range of services that will be offered, but they are intended to diversify the economy through a digitally enabled space.

"The reference to subsidising there, (is) because the council gained a $1 million grant, council wants to get a financial return for ratepayers.

"The one million grants gives it also the opportunity to provide things of benefit to the community such as upskilling, capacity building, workshops, training, education and maybe some cheap co-working space for mums who want to get out of the house.

"But it won't be in competition or under-cutting existing businesses.”

Mayor Tony Wellington said the hub was the result of considerable community consultation and to ultimately create a community benefit such as green space.

He said the council was currently applying for federal funding to help take the project further forward.

Cr Frank Pardon said this was a fantastic project and "private enterprise has virtually overrun us with numbers”.