A Chinese company, Shanghai Zhongfu, has been confirmed as the preferred developer of Ord stage two in WA's north.

The West Australian Government says the company, trading as Kimberley Agricultural Investment, will develop 15,000 hectares.

It says Zhongfu plans to invest up to $700 million over six years to establish the sugar industry in Kununurra.

The company is keen to build a $250 million sugar mill and harvest sugar cane.

The Regional Development Minister, Brendon Grylls, says it aims to produce four million tonnes of cane a year.

He says the scale of the development is one reason Zhongfu was chosen.

"I think for me and the cabinet the scale, the size of the investment, it's a $700-million dollar investment into agricultural development," he said.

"Western Australia is one of the most prosperous places in the world based on our partners in the international community to develop our mining sector.

"We simply want to drive that partnership into new areas of the economy."

Opportunities

JinZhong Yin, the CEO of Kimberley Agricultural Investment, says opportunities will be created. ( ABC News: Jade Macmillan )

Speaking through an interpreter, the CEO JinZhong Yin says opportunities will be created.

"If our vision is realised, there will be significant investment made in northern Australia and opportunities for the people of this area," he said.

"I'm pleased to say that the project will create many jobs for local people.

"However, international expertise will be sought for technical aspects such as the design and construction of the world class sugar mill."

Mr Grylls says the project will drive investment and jobs.

"Their intention is not for the Chinese to do the farming," he said.

"The intention after constructing the farms is to essentially sub-lease that land out and local farmers and others will have the opportunity to come in and essentially grow the sugar on a contract basis."

The Premier Colin Barnett says it is an important step towards diversifying WA's economy.

"I think it will be the forerunner of more overseas investment, particularly from China, into the agricultural industry," he said.

The federal Opposition Leader, Tony Abbott, is in Perth today and has welcomed the decision.

"We support foreign investment provided it's clearly in Australia's national interest," he said.

"And, one of the points that's been in made in favour of this particular foreign investment, is that it's not actually selling the farm, it's building the farm."

Development costs

The Wilderness Society's Peter Robertson says he is alarmed by the development.

"We're obviously concerned about the environmental impacts of trying to impose broad scale agriculture in northern Australia because we know that it comes at an enormous environmental cost and more often than not it fails," he said.

"But we're also obviously concerned about some of the specifics in relation to the amount of money that's been expended and whether the public can expect any real return from it."

Ord Stage Two is a $300 million plus taxpayer-funded program which is part of a state and federal government plan meant to create a northern food bowl.

Mr Robertson says the move amounts to pork-barrelling.

"We know that the National Party in particular sees the seat of Kimberley as one that it can hope to win at the next election," he said.

"And, pouring $300-million of taxpayers money into this development in the east Kimberley could easily be seen as a massive pork-barrelling exercise by the National Party in the lead-up to the coming state election."

The state Opposition Leader Mark McGowan says he has no problems with foreign investment in the area but the terms of the agreement mean taxpayers will not see the benefits.

"$311-million for no money back, for giving the land away in effect, plus no food for West Australian households, or cheaper food for West Australian households, to me isn't the right priority," he said.

East Kimberley shire CEO Gary Gaffney has given his full support.

"Local government will work pro-actively to ensure that the development goes forward," he said.

"Any planning and building requirements; we'll work to ensure they're handled in a very professional and on-time manner as this is an important development for all of Australia."

Before the project can go ahead, the proponent has to reach an agreement with traditional owners, who will get 675 hectares of land.