Landowners who refuse to move from the most contaminated site in the southern hemisphere will have their properties compulsorily acquired by the Western Australian government.

A bill to finalise the closure of the former asbestos mining town Wittenoom in the Pilbara, which was de-gazetted in 2007, was due to be introduced to state parliament on Wednesday.

Five landowners, three of whom still live in the former town site, will be paid generous compensation packages that will cost the state government $2m-$3m in total, lands minister Ben Wyatt said.

Wyatt said many of the 17 freehold properties that remained were bought “effectively for $1 given the nature of the value of them”.

“We’re proposing for a principal property $325,000, then $65,000 for every subsequent property after that,” he told ABC radio.

“We also have a compensation entitlement for if there is no house, it’s just a piece of land, and on top of that, we’ll provide moving fees and relocation fees of $50,000.”

More than 2,000 workers and residents of Wittenoom have died from asbestos-related diseases and Wyatt said he was particularly concerned about tourists who still visited the area, despite signs warning of the deadly risks.

A road sign warns of asbestos in Witenoom, Western Australia. Tourists still visit despite the fatal risks. Photograph: Paul Mayall Australia/Alamy Stock Photo

Pictures and videos posted on social media show that many visitors are disregarding the warnings, or downplaying their seriousness.

Lyniece Bolitho, whose two grandfathers, three uncles and father all died of mesothelioma after working in the blue asbestos mines in Wittenoom, told WA Today last year she was horrified at some of the images posted after she began a Facebook group to collect photographic memories of the town.

She said they showed parents regularly taking their children swimming at Wittenoom Gorge.

“Relaxing drive and day out at Wittenoom!” one parent wrote, posting a photo of their infant sitting in the water.

Traditional owners want the state government to undertake the massive clean-up of about 3m tonnes of asbestos tailings that remain in Wittenoom Gorge.

But Wyatt said that was not likely to happen.

“Even if the state committed billions of dollars to a clean-up project, it is virtually impossible that the area will ever be safe for human habitation,” he said in a statement.

Wyatt said the remaining houses in the town site would be demolished, roads removed and more warning signs erected in a bid to keep people away.

The late Lang Hancock and his business partner Peter Wright built an asbestos crushing mill at Wittenoom in 1939, which was bought by CSR four years later.

Operations ceased in 1966.