The Queensland Government said the new power station would be built to replace the town's existing 20-year-old facility and cater for a predicted increase in the community’s power demands over the next 25 years.

Once complete, ownership of the station will pass to government utility, Ergon Energy.

The diesel-powered facility will consist of two 300kW generator sets and one 250kW set.

The government was also planning a further $350,000 upgrade of Cammoweal’s distribution network to complement the station, a spokesman said.

Three 11,000-volt powerlines connecting the town to the power station, new distribution transformers and augmentation work on existing powerlines would also be undertaken.

State development minister Tony McGrady said the new power station would improve power supply to the region and cater for any increased demand.

“Camooweal is recognized as the gateway to Queensland from the Northern Territory,” McGrady said.

“Tourism and visitor numbers are increasing so this is welcome news.”