New Solar Ventures and Solar Torx plan to build and operate a photovoltaic module manufacturing plant and a small test field on 640 acres of state trust lands under a deal signed earlier this week with state Commissioner of Public Lands Patrick Lyons.
Five subsequent leases are expected to be signed to allow the facility to expand over five adjacent sections.
Eventually, the solar farm will produce more than 300MW, or enough energy to power 100,000 homes, and dwarf existing solar facilities, Lyons said.
New Solar Ventures lead developer Ed Balch told Reuters the likelihood of the $US1.6 billion ($A2.12 billion) project getting off the ground "depends on the greenbacks".
The factory to build the photovoltaic panels would cost about $650 million and the solar farm about $950 million.
Once completed, the solar farm will dwarf a 10MW farm in Germany, which is currently the largest in the world.