The wind turbines will supply more than 1000 megawatts of electricity, equal to about 4.5 per cent of New South Wales' energy needs and enough to service more than 430,000 households.

NSW Lands Minister, Tony Kelly, has signed an "agreement to lease" the land to the developers Silverton Wind Farm Developments, a joint venture between Epuron and Macquarie Capital Wind Fund.

The deal was sealed last week following the granting of planning approval for the project early in June.

Construction will start next year.

A spokesman for Mr Kelly said the Western Division leaseholders, with a total property area covering a combined 150,000ha, would be able to carry out their normal pastoral operations, except for some restrictions during the construction phase.

"The first stage of the project will deliver an estimated 700 jobs during the five-year construction phase and 120 jobs during the operation of the project," he said.

The developer would establish a community fund of $20,000 to $30,000 a year for local infrastructure projects, and funds from the lease agreement would be used for other Crown lands initiatives in the Western Division.

Chairman of Silverton Wind Farm Developments, Rob Sauer, said the State Government had implemented an "innovative" lease system for the site.

"This is a project that will deliver jobs, large scale regional investment and, importantly, a significant amount of clean renewable energy."

One of the leaseholders, Nigel Lawrence of the 37,000-hectare Nine Mile station, said the steady income would "virtually drought proof" the properties from a financial point of view.

The Government had passed legislation last year to allow parallel leases, with the wind farm lease over the top of the pastoral lease.

Mr Lawrence said negotiations had been "long and gruelling" covering issues such as compensation for destocking during construction, legal liability, maintenance, gates, fences, watering points and 'no go' areas for the developers.

In the end landholders were satisfied with the compensation and other payments they would receive.

He said the farmers had been keen to set a good precedent under the parallel lease legislation for other Western Division leaseholders and he believed they had achieved that.