IRRIGATED agriculture is set to be expanded by about 8000 hectares in the Lakeland region of Far North Queensland.
Work on a business case for the proposed Lakeland Irrigation Scheme will soon begin after the federal and Queensland governments both signed a formal project agreement.
Deputy prime minister, Michael McCormack, said the Lakeland Irrigation Area feasibility study was completed early last year.
The detailed business case and approvals for the Lakeland Irrigation Scheme are due for completion by late September 2022.
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"The proposed scheme has the potential to expand irrigated agriculture by around 8000 hectares," Mr McCormack said.
"It will also support around 1100 long-term jobs and provide a major economic stimulus for Northern Australia."
The $10 million business case is being funded through the feasibility component of the $1.5 billion National Water Infrastructure Development Fund.
Queensland senator, Susan McDonald, said the business case was a major step for the project, delivering the final engineering and scoping works on this region-defining project.
"I know just how vital water is for all our farmers and in fact the whole community in Lakeland, which has long established itself as home to a vibrant agricultural precinct," Senator McDonald said.
"This is why we are continuing to fund feasibility studies and business cases into projects which will help us increase local water supply and security, grow our world-renowned agriculture sector and build resilience to drought in our regions."
LNP shadow natural resources minister, Dale Last, said there were massive opportunities in the Lakeland area, which has been hamstrung until now by a lack of water.
"This announcement will allow farmers to expand and more importantly create those much needed jobs in Far North Queensland," Mr Last said.
"The State LNP is committed to delivering water security by establishing the Queensland Dam Company to get new projects like Nullinga Dam shovel ready for construction."