Australia's largest cotton farm has been sold to a Chinese-led consortium.

Cubbie Station's administrators have signed a formal agreement to sell the vast property, and its extensive water rights, to the consortium led by the Shandong RuYi Group and an Australian company known as Lempriere.

The sale price has not been revealed and the contract is still subject to finance and regulatory approvals.

The station's eventual sale was approved by the Federal Government at the end of last month on the advice of the Foreign Investment Review Board.

Three years ago Cubbie Station, Australia's largest cotton farm and the biggest irrigation operation in the southern hemisphere, was placed in administration with debts of about $300 million.

The 93,000-hectare property amalgamates 12 flood plains, with huge dams stretching across 28 kilometres of the Culgoa River at the top of the Murray-Darling Basin system.

Initially, Shandon RuYi will hold 80 per cent of the value of the investment but there is an enforceable undertaking set by Federal Treasurer Wayne Swan which will require it to sell down that holding to no more than 51 per cent within three years.

There are also conditions on the contract set by Mr Swan which will require the existing workforce to be used and that a subsidiary company of Lempriere will actually have the day-to-day running of the operations.

It will be required to do them on an arm's-length commercial basis because of the concerns that China would be looking to shore up its resources security through this investment.

The new owners must also report to the Foreign Investment Review Board every 12 months.

Dale Miller from AgForce has welcomed the announcement, saying it will boost confidence in the industry.

"It brings certainty into that investment sphere so that the local economy is likely to see a reinvigoration of that enterprise," he said.

Balonne Shire Mayor Donna Stewart says most of her constituents are opposed to the sale of Cubbie Station.

"A very sad for Australian people as a whole that we're selling off prime agricultural land to foreign interests," she said.

But she says some farmers support the sale.

"They are saying that it needs to come out of administartion," she said.

Nationals senator Barnaby Joyce says the Government has signalled it is open slather on the sale of Australian farm land by allowing the Cubbie sale.

"If this property can go through, then what one would they ever stop?" he said.

"That would basically mean that any of the farming land in Australia, any of the crucial farming land in Australia, if someone wants to buy it from overseas, they can.

"No-one's explained to me if there was any line in the sand anywhere."

Senator Joyce has been a long-time opponent of a foreign takeover of Cubbie, and his critics have labelled his stance xenophobic, claims he denies.

Last month, independent MP Tony Windsor called for an investigation into claims Australian investors offered a higher price for Cubbie Station than its eventual foreign buyers.

His call came after the ABC's PM program revealed that at least a dozen Australian bidders expressed interest in buying the farm, but were rejected.

PM was told some of the rejected bids came from local businesses offering more money but that they were rejected by the station's administrator.