The greenfields underground longwall operation, which is expected to produce up to 6 million tonnes per annum run of mine coal, will employ 350 locals.
Most of this will be low-ash hard coking coal for steel production, with first coal scheduled from the first quarter of 2020.
"This project offers around 20 years of jobs for regional Queensland communities - with 160 contractors during construction, and up to 350 operational staff," Queensland Resources Minister Anthony Lynham said.
"Ironbark No.1 comes on top of the 13 committed resources projects in Queensland with a combined capital value of more than $9.4 billion across multiple commodities.
"Another 42 projects are at feasibility stage, with a combined capital value of more than $65 billion, again, across multiple commodities."
Fitzroy Australia Resources bought Ironbark No.1, the neighbouring Carborough Downs mine and the Broadlea project from Brazilian mining giant Vale in November 2016.
Ironbark will share major infrastructure with Carborough Downs.
Fitzroy Australia Resources CEO Grant Polwarth said he was excited to have reached this major milestone.
"This approval allows us to pursue our vision for the expansion of Fitzroy, providing opportunities to our existing workforce, the local community and the region more broadly," Polwarth said.
"Ironbark No. 1 will be a modern and innovative underground operation.
"At Fitzroy, we pride ourselves on being a people business that mines coal, and the construction of Ironbark No.1 will see that vision continued."
Fitzroy's assets include some 98,000 hectares of tenement holding in the world class central Bowen Basin for metallurgical coal.
"Ironbark No. 1 is the first new development in realising the potential of this significant portfolio," Polwarth said.
Member for Mackay and Assistant State Development Minister Julieanne Gilbert welcomed the announcement calling it great news for Mackay and coalfields families, and businesses, especially those affected by the recent job losses at Hail Creek.
"It shows that the resources sector continues to offer bright prospects for our region well into the future," she said.
QRC chief executive Ian Macfarlane said about 160 jobs would be needed for construction.
