Managing director of owners Clyde Agriculture, John McKillop, and Federal Water Minister Penny Wong and NSW Environment Minister Carmel Tebbutt, announced the sale in separate statements late on Wednesday.

Clyde Agriculture successfully negotiated a purchase agreement on a bare-basis with the NSW Department of Environment and Climate Change (DECC), which has received "substantial funding assistance" from the Federal Government.

Mr McKillop said the purchase price was in line with independent valuations for the land and water entitlements.

"Our decision to sell prior to auction was based on gaining fair value for the asset and taking advantage of the certainty of a firm bid on the table from DECC," Mr McKillop said.

"We understand the property, upon settlement, will be managed by the NSW National Parks and Wildlife Service and that irrigation entitlements attached to the property will be used for environmental purposes."

Toorale Station is a 91,383-hectare sheep and cattle breeding and finishing operation on the junction of the Darling and Warrego River, 60km downstream from Bourke.

It has more than 2000ha developed for irrigation.

Toorale holds a Darling River licence and additional licences for a system of banks and levies originally built in the 1880s that spread moderate to high flows in the Warrego River across the floodplain.

Senator Wong said the NSW Government would take responsibility for preserving the land, while the water would be transferred to the Commonwealth Environmental Water Holder.

She said the agreement delivers a significant boost to environmental flows in the Darling River, whilst also providing a boost to the NSW reserve system.

"In securing these water entitlements and floodplain harvesting rights, the deal will return an average of 20 gigalitres of water to the Darling River each year, peaking at up to 80GL in flood years," Senator Wong said.

"Returning this water to the Darling will begin to turn around the long term decline of this once great river."

Clyde Agriculture has offered four properties for sale in order to rebalance its property portfolio, which, the company says, is currently heavily weighted to livestock production.

Mr McKillop says Clyde Agriculture plans to reinvest in agriculture by purchasing more dryland and irrigated farming holdings.

The auction of another Clyde property in the region, Brewon, Walgett, NSW, will proceed as scheduled today.