Tasmania's RSL is opposed to plans for a $715 million stadium on the Hobart waterfront because of the "cultural and environmental" impact it would have on the nearby cenotaph.
The stadium, which requires the federal government to contribute $240m to get off the ground, has become a prerequisite for the island state being granted a team in the AFL.
Its proposed site at Macquarie Point is close to the Hobart Cenotaph, described by RSL Tasmania as a "sacred place of reflection".
RSL Tasmania CEO John Hardy has penned a letter to Premier Jeremy Rockliff following extensive consultation with the body's membership.
"We are opposed to the stadium at Macquarie Point due to the environmental and cultural impact on our world-class cenotaph," Hardy wrote.
"We believe that the Tasmanians that erected this obelisk as an outpouring of unmeasurable grief after their loved ones made the ultimate sacrifice, would stand beside us shoulder to shoulder."
The state government - which has pledged $375 million to the stadium - and the AFL have described the project as a game-changer for Tasmania.
But there is opposition, including from Labor and the Greens at state level as well as a group of Tasmanian federal Liberal, independent and Greens politicians.
The federal Labor government says it is assessing the project and will consider funding ahead of the May budget.
Rockliff said he would work with the state's RSL and understood the cenotaph was of great significance.
"We'll continue to engage with RSL Tasmania to ensure their feelings ... their concerns, their ideas are taken into consideration," he told state parliament on Wednesday.
Hardy says RSL Tasmania supports the state's quest for an AFL team as well as a new stadium, but not at Macquarie Point.
"The AFL has always supported veterans, it is a working person's game, and I believe the AFL will understand our issue," he wrote.
"The veterans of this island know that we must prosper, and that far too often Tasmanian representation is neglected on a national stage.
"But more than most, we also understand that some things are worth fighting for, and we must be forever vigilant."
The AFL last week announced it would pump $360 million into a new Tasmanian franchise across a decade.
The league is planning to contribute $15m towards the stadium but CEO Gillon McLachlan has indicated that figure could increase.
