Deputy Premier John Barilaro commits to a Narrabri special activation precinct

Mr Barilaro said his Department of Regional NSW would take carriage of investigating how to develop the project, which will cover the entire town.

An investigation into the scope of the project will take 18 months. But he committed that shovels would hit the ground during "this term of government" - before 2023.

"Every time I come to Narrabri I get excited," he said.

"I wish I'd bought property here a number of years ago, but I missed that boat. I'll probably get in trouble for that."

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He said the scheme was a "once-in-a-lifetime opportunity" to change the region forever, develop or attract new industry and diversify the town's economy.

"I believe in 18 months time when we're here, shovels in the ground [there will be] a couple of hundred million dollars going into the infrastructure that will unlock the opportunity."

The announcement comes after gas company Santos won state approval for a $3.6bn coal seam gas project outside the town in September.

Combined with the national Inland Rail Port, set to run through the town, Mr Barilaro said the two projects could turn the region into one of "the economic hubs of regional NSW".

In a previous announcement in the town, Mr Barilaro said Narrabri's Inland Port project could be the most significant site on the route of the national Inland Rail project.

Standing outside Wilga Park power station, the MP told media the two projects together gave the region all the ingredients to attract new business.

He said it would turn the region into an "economic energy hub" for NSW.

Narrabri Mayor Ron Campbell said the plan would bring "immense" prosperity for the Narrabri shire.

"This is an historic moment for Narrabri shire," he said.

"These are historic times for our shire and certainly for the region as well. The special activation precinct is something quite unique - has the potential to be quite unique - in Narrabri.

"Rather than it being set up just over the industrial precinct itself, we are looking to set it up over the whole community, so we get support from the government, so we can build the community into what we recognise it needs to achieve the opportunities that are ahead of us."

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The activation precinct - which will be funded by the $4.2 sale of the Snowy Hydro scheme - will fund improvements to health, school, transport, "lifestyle" and residential infrastructure, he said.

The Narrabri Gas project has yet to win Commonwealth approval under the Environmental Protection and Biodiversity Conservation Act, but Mr Barilaro said he was "confident" about Federal approval.

The inland port will develop a large industrial precinct and freight exchange and house the proposed ammonium nitrate and baking soda manufacturing hubs Santos said could follow development of its gas project.

The inland port is expected to create 1000 jobs on its own.

State government money will help pay for essential infrastructure including water, electricity and communications connections that operators need to relocate close to the Inland Rail route.

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The Department of Regional NSW will also do master planning for the scheme, in order to speed up its approval process.

The 850-well Narrabri gas project is controversial both in and outside the community.

Narrabri-based energy consultant Rowan Boehm, who opposes the gas project, said renewable energy "is the future for NSW and the North West".

"The NSW Government's own roadmap defines this very clearly, and it also very clearly does not identify the need for a major gas hub for the region."

"Gas might have been the right direction 50 years ago, but that's not the case today."

He said the "energy hub" is just a smokescreen "for a last hurrah for the gas industry".

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