The Northern Territory government has lifted a ban on hydraulic fracturing of onshore gas that will open up more than half of the territory's land mass to the controversial practice.

The first exploration fracking by petroleum companies is expected to occur early next year after the implementation of a regulatory regime and new laws, which the government insists will be strict.

The issue has sharply divided Territorians, many of whom believe fracking threatens water supplies, but Chief Minister Michael Gunner said on Tuesday the industry will create jobs.

More news Russia blamed after cyber attacks hit up to 400 Australian businesses

An independent report handed down by Justice Rachel Pepper last month found the risks associated with hydraulic fracturing of gas deposits could be managed and regulated.

Mr Gunner said the government had accepted the inquiry's advice about no-go zones.

"Forty-nine per cent of the Territory will be 'frack-free', including in national parks, conservation areas, indigenous protected areas, towns, residential and strategic assets, and areas of high cultural, environmental or tourism value," he said.

In the rest of the NT, strict laws and regulations would protect areas and the independent EPA and Environment Minister would sign off on any fracking.

Environmental groups and scientists have pressured the Labor government to keep the fracking moratorium it introduced, arguing it would adversely impact on water, land and public health.

However the federal government has similarly pressured the NT government to allow the economic exploitation of its gas resources.