Construction will start in January, 2014 on the largest power station in the southern hemisphere.
The 155 megawatt solar project was announced after an agreement was reached between the Australian Renewable Energy Agency (ARENA) and AGL Energy Limited.
It will be built across two sites in Western NSW and will cover a combined area four times the size of the Sydney CBD.
Federal Climate Change Minister Mark Butler said Australia has the highest average solar radiation per square metre of any continent in the world.
"This project is 15 times larger than any other solar power station in Australia and represents a big step forward towards making solar a bigger part of Australia’s energy mix,” he said.
NSW Minister for Resources and Energy Gary Gray said the project means an additional 50,000 homes across NSW will be powered by clean energy each year.
The NSW Government will invest $64.9 million in the project.
AGL, together with solar developer First Solar, will construct a solar power plant near Nyngan (102MW) in central NSW and another near Broken Hill (53MW) which together will create over 450 local jobs during construction.
In addition to the $166.7 million the Federal Government is investing through ARENA, it is also providing $40.7 million under the Education Investment Fund to assist the University of Queensland and the University of NSW to conduct related solar power research.
Since 2007, Australia’s wind capacity has trebled and more than 1 million solar panels have been installed.
Construction is scheduled to commence next year in January at Nyngan and in July at Broken Hill.
