The plant will be developed by Queensland state-owned utility CS Energy at a site adjacent to the Kogan Creek open-cut, near Chinchilla. Coal will be sourced from the 300 million tonne Kogan deposit.

The station will generate 750 megawatts of electricity and is forecast to provide 7% of Queensland's electricity demand, Queensland premier Peter Beattie said.

The project will create 1000 jobs at the peak of the 39-month construction and 120 permanent positions.

"The supercritical plant technology, improved plant efficiency, and Kogan Creek's clean coal mean the plant will produce much less greenhouse gas than conventional plants," said Beattie.

Energy Minister Stephen Robertson the Kogan Creek licence was the last coal fired generation licence issued under the Queensland Energy Policy - A Cleaner Energy Strategy, which states that no further generating licences for new coal-fired power stations will be issued by the State unless there is a clear and demonstrated need.

Including Kogan Creek, Queensland has invested a total of $4.7 billion into new electricity generation since the National Electricity Market (NEM) began in 1998, around three quarters of the $6.3 billion in new generation investment throughout the NEM.

Work on the Kogan Creek site will start later this year.