A generalization of the density functional based tight‐binding method (DFTB) for the use with range‐separated exchange‐correlation functionals is presented. It is based on the generalized Kohn–Sham (GKS) formalism and employs the density matrix as basic variable in the expansion of the energy functional, in contrast to the traditional DFTB scheme. The GKS‐TB equations are derived and appropriate integral approximations are discussed in detail. Implementation issues and numerical aspects of the new scheme are also covered.