Transmission lines spanning hundreds of kilometres have been approved to connect a key renewable energy precinct to the grid, paving the way for work on the project to begin.
The NSW government is hailing the Australia-first approval for transmission infrastructure to a designated renewable energy zone (REZ) after clearance was given for the Central-West Orana project.
The area, near Dubbo, is also the first renewable energy zone to be declared nationwide and is expected to attract around $20 billion in private investment.
It should deliver at least 4.5 gigawatts of electricity, enough to power 1.8 million homes.
Large-scale solar, wind and energy storage projects will all form part of the 20,000 square kilometre hub.
Energy Minister Penny Sharpe said the government would work closely with local communities, parts of which have objected to the prospect of transmission lines running through farms and forests.
"This is the first REZ transmission project in the country to obtain planning approval, paving the way for a significant boost in renewable energy generation to replace ageing coal-fired power stations," she said.
"It's not just about clean energy, this project will bring long-term financial benefits to both NSW electricity consumers and the local communities which will host the REZ."
NSW Energy Minister Penny Sharpe says the energy zone will bring long-term benefits to consumers. (Bianca De Marchi/AAP PHOTOS)
The project would be crucial to NSW meeting its 2050 net-zero obligations, the government said.
Official forecasts show the state is expected to fall short of its emission-reduction targets for 2030 and 2035 based on current abatement measures.
The approval follows calls for major transmission-line projects to be built underground rather than over land, with proponents citing reduced bushfire risk and the opportunity to protect farms.
But the suggestion has been rejected due to the increased cost and the time involved.
NSW Nationals leader Dugald Saunders said landowners felt let down and left behind by the government's lack of consultation to date.
"There's still no clear picture on the cost of this and given everything else has gone up in price, the government needs to provide some clarity on that," he told AAP.
"Works will start as early as December and it's a very simple call, (developer) ACEREZ needs to make sure it is properly consulting with landowners, and that means literally going property to property and telling them the impacts."