Tim, I suggest looping through the file yourself in any case, its fairly simple: and using tr/// instead of s/// is an improvement.

open(OLD,'<','large_file.txt') or die "$!";#open old file
my @old_file_contents = <OLD>;
close(OLD);
open(NEW,'>','test.txt') or die "$!";#open new file
foreach my $line(@old_file_contents){
     $line =~ tr/\t//d; #delete tabs
     print NEW $line; #print line to new file
}
close(NEW);
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UPDATE: I see your replacing them with a space, so maybe just try

$s =~ tr/\t/ /;
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