Mining company Iron Road has been granted South Australian government development approval to develop a $4.5 billion magnetite mine on the state's Eyre Peninsula.
The project will include a 145-kilometre rail line and construction of a deep-water port at Cape Hardy.
The company says construction work will start in 2018, once financing is secured, with the project to create 2000 construction jobs and 700 ongoing positions over the mine's 25-year life.
Annual production of magnetite, a higher-grade iron ore sought out by international steelmakers, is expected to top 21 million tonnes.
The mine is subject to a range of conditions and further environmental approvals and Iron Road continues to seek funding, but Premier Jay Weatherill says the project will be Australia's largest magnetite mine and have a lasting impact on the state's economy.
"Connecting the Eyre Peninsula to the world's markets through a modern rail link and deep water port that can be used by other businesses will also enable this important region of our state to grow," Mr Weatherill said.
Iron Road managing director Andrew Stocks says the project now has real momentum and has attracted strong interest from a number of banks.
He says the mine will be a major boost to the Eyre Peninsula region.
"The area in which we operate is a community of grain farmers and we've seen a steady decline in population over the last 30 years," Mr Stocks said.
"We can help diversify the regional economy, we can help reverse the population decline."