Under the proposed agreement Adani would pay just $2 million a year in royalties once the project starts operating. The royalty rate would then increase after several years, according to the ABC.
The Queensland Premier and Treasurer Curtis Pitt are locked in negotiations with Adani and want to secure the project, which would provide much needed economic development for central Queensland.
"What we know about this project is that it is vital for regional jobs," Palaszczuk said.
The Carmichael project is expected to produce 25 million tonnes of coal a year in its first phase.
Analysis by the The Australia Institute estimated an Adani royalty holiday could cost Queensland nearly $1.2 billion in revenue.
"This policy would effectively give Adani free coal for five years and discounted coal for another four," it said.