The approval will see up to 20 million tonnes per annum of coal mined for the next 21 years.

The federal government passed up the opportunity to develop the mine itself, instead opting to complete the approvals process in order to lease or sell it.

The PAC ruled the potential social benefits outweighed the cost to the community and made 90 recommendations to mitigate noise, dust and environmental impacts.

The commission said $20 million in transition funding was generated by the NSW government to counterbalance the impact of delays to the construction of the mine.

The fund would be shared across four local government areas but the Warrumbungle Shire Council said Dunedoo was the worst affected area and should be treated accordingly.

Warrumbungle Shire general manager Steve Loane said he was pleased the commission had recognised the severe impact the uncertainty about the mine had on the economy of Dunedoo.

It is hoped the impact will be reflected when the state government announces the successful projects under the Cobbora transition fund in the state budget.

The commission recommended a land management plan be prepared with a representative from the local farming community to ensure farmers could keep working land set aside for the mine if there was a delay to its development.

The commission also insisted the Australian Astronomical Observatory at nearby Coonabarabran be consulted for the development of a light management plan so its studies were not affected.

The project still has to be signed off by the federal government and the state government is yet to sell or lease the mine.