The health of Tasmania's Macquarie Harbour appears on the rise several years after poor water conditions prompted the environmental watchdog to restrict salmon farming.
Maximum fish levels in the east coast harbour were in 2016 cut by the Environmental Protection Authority after a massive drop in its health.
Scientific studies found low oxygen levels and high amounts of bacteria, plus several "dead zones" near a World Heritage area.
But the latest Institute for Marine and Antarctic Studies (IMAS) health report, released on Monday, found the harbour's water and sea floor were showing signs of improvement.
"In 2018, oxygen levels in the middle and bottom waters of Macquarie Harbour declined in spring but not for as long or to the same extent as we've seen in recent years," researcher Dr Jeff Ross said.
"This improvement was reflected in the latest survey of seabed conditions that we carried out early this year."
Benthic species, those that live near or at the bottom of the ocean, were also in better shape than in recent summers, Dr Ross added.
He said while the harbour's health trend was encouraging, oxygen levels remained lower than historically observed and monitoring was ongoing.
"These observations will provide us with a growing body of data about how well the harbour is recovering," Dr Ross said.
IMAS will continue to monitor oxygen levels, with another survey of sediment to be undertaken in January.
Environmentalists and the Greens have called for salmon farming to be stopped in the harbour.
Across eight months from late 2017, roughly 1.38 million farmed fish died there, mostly from disease, prompting a reduction in overall biomass from 12,000 to 9,500 tonnes.
Australian Associated Press