A young man has been slain and another taken to hospital after a fight broke out in a popular waterfront tourist precinct.

The men suffered stab wounds when two groups clashed off Hobart's Salamanca Place in the Morrison St car park about midnight on Saturday, police said.

It happened metres away from the Salamanca Market, along the picturesque sandstone-lined tourist strip.

A 20-year-old man died from his injuries, while a 23-year-old man was still in hospital being treated for non-life-threatening injuries on Sunday morning.

Police said it appeared to be an "isolated incident" that was possibly linked to a previous incident involving a person from each group.

A 20-year-old has been taken into custody, as officers try to track down others caught up in the deadly fight.

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