Australia's largest irrigation property, Cubbie Station, is about to be placed in voluntary administration.

Cubbie Station sits on the upper reaches of the mighty Murray-Darling river system, and its water storage capacity is equal to that of Sydney Harbour.

The move into administration means the massive cotton farm in southern Queensland could be snapped up for far less than the rumoured asking price of $450 million.

Cubbie Station's huge water storage capacity is often blamed for the lack of water downstream.

But Cubbie group chairman Keith De Lacy says Australia's largest cotton farm has been beaten by the drought.

"This drought has gone on just two years longer than it should have done, by all the record keeping and analysis that we've done, and it's just pushed us over," he said.

Cubbie was put up for sale in August with a rumoured price tag of $450 million.

But it is believed the five bids made were too low to match even the $320 million in debts to the National Australia Bank and Suncorp.

Mr De Lacy says now that the banks have appointed administrators McGrathNicol, Cubbie could be snapped up cheaply.

"That's the likelihood, but that will be determined over the next few weeks," he said.

"If the bank is moving in that direction, they must have decided that they're going to accept less than what they're owed."

Ian Burnett from the rural lobby group AgForce says several grower groups have shown an interest in purchasing Cubbie.

"It wouldn't take that much for the whole operation to turn around," he said.

"We're hopeful that this summer will provide better season conditions. If we get continued dry periods and there'll only be a limited time to how long they can continue operating."

Cubbie 'not to blame'

Cubbie Station has long attracted controversy over its massive water allocations.

New South Wales, Victoria and South Australia have all argued the cotton farm colossus in Queensland takes too much water from the Murray-Darling system.

But Mike Young, the director of the Environment Institute at Adelaide University, says Cubbie is not to blame for a lack of water downstream.

"Cubbie's been an icon because it's so big and because of where it's located," he said.

"But the reality is that even if all the water was left in the river at Cubbie, then irrigators in New South Wales would end up taking the water out and very little would make it through - that's because of the way the licences are written at the moment.

"It's possible to negotiate what are called shepherding agreements to take water all the way through.

"But even then most of the water is lost. You'd only get about 10 to 15 per cent of the water in Cubbie all the way through to the River Murray."

The Federal Government wants to buy back water across the Murray-Darling Basin, and has already started.

But Professor Young doubts the Commonwealth would be interested in Cubbie Station.

"I would be surprised if they would be interested at buying Cubbie unless the price became very, very low," he said.

"At the moment the priority and the urgency is in the southern connected system around the Murrumbidgee and the Murray and all of the tributaries of Victoria.

"I'm sure [Water Minister] Penny Wong and her staff are all looking very carefully at the southern system because that's where the problems are."

Neither the Commonwealth nor the Queensland Government would comment on Cubbie going into administration.