Senior government officials said a complex series of agreements for corporatising the scheme was close to completion after eight years of negotiations between the Commonwealth, Victoria, NSW and South Australia.

Under the intergovernmental agreements being finalised, the authority's assets and liabilities will be transferred to Snowy Hydro Ltd, a corporation which will be jointly owned by the NSW, Victorian and Commonwealth governments.

The Snowy Mountains scheme is the largest renewable electricity generator in mainland Australia and plays a key role in both the national electricity market and in supplying water in inland Australia.

According to industry observers, the corporatisation of the authority will have significant implications for electricity reform and the Commonwealth's finances, and will lead to a major capital raising in Australia's debt markets later this year.