A wind farm to be built in far north Queensland will generate enough renewable energy to power a regional city.

Ergon Energy and proponents Ratch Australia and Port Bajool on Friday signed a power purchase agreement to build the 170 megawatt Mount Emerald Wind Farm, near Cairns.

About $400 million in total expenditure is projected during the project’s two-year construction phase and 25-year operational period.

The project is also expected to boost the region’s economy by $900 million through direct and indirect flow-on impacts.

Energy Minister Mark Bailey said the project would mean the state’s wind energy production, which sat at 12 megawatts, would be increased by 15 times.

“It will not only create 150 jobs in far north Queensland … it will also generate enough power to power a city the size of Mackay,” Mr Bailey said.

Ergon chairman Clive Skarott said he hoped the project would spark an economic resurgence for Queensland’s far north.

“We haven’t had a project of this size for a long, long time,” Mr Skarott said.

“And I believe that with the starting of this project, it will start to give confidence and hopefully that confidence will mean other projects will start in far north Queensland as well.”

Construction is expected to start towards the end of the year.