Mines minister Dr Anthony Lynham said the board would be able to conduct public hearings, call witnesses and make broad inquiries, findings and recommendations relating to the Grosvenor incident.
"Last week's underground gas explosion is something the industry has not experienced for more than quarter of a century," Lynham said.
"An underground gas explosion in a coal mine is simply unacceptable in the 21st century.
"As serious as it was, it could have been far worse, as every underground coal miner and their families know.
"The inquiries that followed the underground gas explosions at Moura changed mine safety in Queensland.
"This latest board of inquiry is an opportunity to continue this government's sweeping reforms to protect mine workers."
The previous Queensland mine gas explosion was Moura No 2 in 1994, when 11 men failed to return to the surface.
A Mining Warden's Inquiry - forerunner of boards of inquiry - made a number of recommendations, including around self-rescue apparatus for miners, training for managers and requirements for safety and health management systems.
"Queenslanders remember the terrible accidents at Moura No.2 and No.4 coal mines," Lynham said.
"The inquiry reports that followed those tragedies recommended safety measures that still protect mine workers today and that have no doubt prevented further incidents and saved lives over the past two decades.
"Queensland has the world's toughest mine safety and health laws, more inspectors on the ground than in a decade, and industrial manslaughter laws before the parliament.
"This latest board of inquiry is an opportunity to continue this government's reforms to protect mine workers."
Lynham said a shortlist of board of inquiry members was being considered and terms of reference refined.
"I expect to be able to announce the board membership and detailed terms of reference by the end of May, with the inquiry to commence immediately.
"The board will conduct its inquiry so as not to prejudice any potential future prosecutions.
"It will provide an interim report before the election, which I will table in Parliament, and a final report, also to be tabled."
Anglo American Metallurgical Coal business CEO Tyler Mitchelson said the company will cooperate fully in all investigations into the Grosvenor methane ignition incident.
"We want answers as to why an ignition of methane occurred at Grosvenor mine and we understand that everyone else does too," he said.
"We have already commenced our own technical review into the incident with industry experts, including in the areas of methane and ventilation management and forensic fire analysis.
The Queensland Resources Council said it would also cooperate with the independent board of inquiry.
QRC chief executive Ian Macfarlane said the board of inquiry into the incident would be conducted under the Coal Mining Health and Safety Act 1999.
"There is no higher priority than safety for QRC and our member companies," Macfarlane said.
"No one should pre-empt the findings of the Inquiry or the Mines Inspectorate investigation already underway. Everyone should continue to pray for the five injured workers, their families and workmates and thank those first responders and hospital workers caring for the injured miners."
News of the inquiry came just a day after a staged re-entry into Grosvenor was held after Anglo American's risk assessment received approval from the Queensland Mines' Inspectorate.
Mitchelson said the staged re-entry ensured all safety controls were in place, including reconnecting the gas monitoring equipment, restoring power to the underground and pumping excess water from the mine.
"Re-entry to the mine will enable investigations into the incident to commence," he said.
"We will ensure our investigation draws on the best possible expert advice.
"We will not resume mining until we are satisfied that we know what happened and how we can avoid it happening again.
"Our team at Grosvenor has worked tirelessly, under challenging circumstances, to ensure we can safely re-enter the mine so we can begin investigations and I want to acknowledge their work and dedication."
Mitchelson said the miners due to work at Grosvenor last week had been sent home on full pay and that the company would continue that approach day by day as it stepped through its investigation.
"It would not be right for us or anyone else to comment on the circumstances leading up to this incident, as this will all form part of the thorough expert investigation," he said.
"It is therefore very premature for anyone to speculate on the causes of this particular incident."
Mitchelson said the mineworkers injured in last Wednesday's blast continued to receive the treatment at the Royal Brisbane and Women's Hospital.
"We are incredibly grateful to all the staff who are caring for our colleagues and their families, and to all those who are also offering support," he said.
"Our focus remains on the care of our injured colleagues and their families, and finding out what went wrong."