Parnell's office said the forest, an initiative of the governor created last year, now will cover nearly 48,500 acres.
Parnell said the expansion will allow the state Division of Forestry to manage the land in a way that prolongs the timber supply for local processors and for energy needs. He says it will provide "much-needed" thinning and logging jobs.
Southeast Alaska's timber industry is a fraction of what it once was.
Parnell's office says the new lands will continue to be available for multiple uses, including wildlife habitat, hunting, mining and recreation.
The bill is House Bill 105.
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