The construction of the £500 million Tees Renewable Energy Plant has been approved by the Government.
The project, being developed by MGT Power, is one of the largest biomass plants to be built in the world.
Tenders are now open for main contractors for the plant, which will be constructed at a disused industrial site at Teesdock.
The scheme is expected to create 600 new jobs during the three-year construction period, as well as 150 permanent jobs during the station’s lifetime.
Daniel Tain, partner at law firm Shadbolt – which advised MGT Power on the scheme – described it as “a benchmark project for the UK renewables energy market”.
The 295MW plant, which will enter commercial operation in 2012, will save 1.2 million tonnes of carbon dioxide per year and will generate enough electricity for 600,000 homes in the North-east of England.
MGT Power director Chris Moore said: “Other similarly sized biomass plants are proposed in other parts of the country but our Teesport project is currently two years ahead of the pack and likely to be one of the first to be operational.”
Plans for the project were first unveiled last July.
Energy minister David Kidney approved the scheme as part of the launch of the Government’s UK Low Carbon Transition Plan, which detailed how the UK will meet new carbon-reducing targets.