The Foreign Investment Review Board (FIRB) has approved the application of Moon Lake Investments to buy the dairy giant Van Diemen's Land Company (VDL).

Key points: FIRB approves sale of New Zealand-owned Tasmanian dairy giant Van Diemen's Land Company to Moon Lake Investments

FIRB approves sale of New Zealand-owned Tasmanian dairy giant Van Diemen's Land Company to Moon Lake Investments Federal Treasurer Scott Morrison says investment commitments from the buyer mean more jobs in Tasmania

Federal Treasurer Scott Morrison says investment commitments from the buyer mean more jobs in Tasmania Mr Morrison said there would be no negative impact on Australian milk supplies, with projects promising an increase in production

The approval is conditional only on the buyer complying with Australian taxation laws.

Federal Treasurer Scott Morrison said he considered the national interest test and how it applied to this case, including the likely impact on local jobs and increased investment to support economic growth.

Mr Morrison said Moon Lake, owned by Chinese businessman Lu Xianfeng, had given guarantees all current VDL employees would be offered ongoing employment, on terms no less favourable than present.

Moon Lake has committed to undertake investment projects in the VDL farms, which Mr Morrison said would provide additional economic activity in Tasmania.

Moon Lake estimates the investments will nearly double employment at VDL.

Mr Morrison said this would guarantee more than 140 local jobs, generate an intended additional investment of more than $100 million and an expected additional 95 jobs.

Moon Lake advised it intends to continue to supply the milk produced at VDL under the same contractual terms currently in place.

Mr Morrison said this provided assurance there would not be an impact on the supply of milk and milk products in Australia, and planned investments may increase milk supply to the domestic market.

He said the company also committed to honour environmental considerations and recognised the importance of areas of VDL's operations to Aboriginals.

VDL is being sold by New Zealand's New Plymouth District Council and has been foreign owned since it was established on a royal land grant 190 years ago.

The company milks 17,890 cows over 7,062 hectares and has Tasmanian approval to expand operations by clearing more than 1,800 hectares of native vegetation.

Businesswoman Jan Cameron planned to underwrite a rival bid for VDL, in an attempt to put the business into Australian hands.

Moon Lake Investments made a $280 million binding offer last year to buy the dairy company.

VDL chief executive David Beca said he expected an exciting new era under Moon Lake.

"Mr Lu has made some strong commitments about future investment in expansion, growth and innovation in the future operations of the business, subject to development of detailed business cases," he said.

"Mr Lu has also talked to us about his vision for innovation and marketing of high-end produce into the Chinese market.

"We will be working to develop the business cases for more immediate investment in the existing dairy farms including irrigation, with investment in new dairy farms on existing pasture to follow this."

VDL's seller New Plymouth District Council also welcomed the FIRB decision.

Keith Sutton from Taranaki Investment Management (TIML), which manages the council's investment fund, said it was looking forward to completing the sale.

"TIML will move promptly to complete and settle the sale of the business and assets of TLC and VDL to Moon Lake Investments," he said.

Support for FIRB's green light on VDL sale

Tasmanian Liberal Senator Eric Abetz welcomed the decision.

"We will see 95 more jobs and $100 million of extra investment, which will be a very real boost for the Circular Head part of our Tasmanian community," he said.

Cows in a pen at the Van Diemen's Land company's farm in north-west Tasmania. ( ABC News: Alex Blucher )

"This is good news for all of Tasmania because it shows that ... we are open for business, we do welcome investment in our state and our nation."

Senator Abetz was confident Moon Lake Investments was best placed to take over the company, and not Ms Cameron, who made a bid for the company last month.

"I think the Circular Head community were very wise to be backing this proposal," he said.

"The VDL company has always been in foreign hands.

"Would I like to see it in Tasmanian hands? Of course I would. But the reality is that the market has spoken and the vendor has been able to achieve a $30 million higher purchase price.

"That boosts the value of all Tasmanian agribusinesses when you see and know that people are willing to invest at such a high level."

Mayor welcomes decision, boost to job prospects

Circular Head Mayor Darryl Quilliam agreed.

"Obviously we would have liked to have seen Woolnorth owned by a Tasmania or Australian company, but it's also important to remember that we need a company that's got money to be able to spend - and prepared to spend - on new developments in the dairy industry," he said.

"There'll be farm conversions, so it'll mean more work for more people.

"We need to be supporting economic development and this announcement is a good announcement for economic development right along the north-west coast."

Mr Quilliam said Mr Lu's bid for VDL was widely supported by the local community.

"Mr Lu has the money and has the passion to not just continue to keep Woolnorth as it is, but he wants to develop it," he said.

"Jobs are important and so people that are prepared to spend money on the industry is more important."

Mr Quilliam hoped the sale process would progress quickly.

"Woolnorth has been on the market now for two or three years now, and it was getting to the stage where it was unfortunate that it was taking so long," he said.

"I have a lot of confidence now that this decision is a good decision, not only for Circular Head but also for the Commonwealth."