The Hughenden Irrigation Project has been given a plug by Prime Minister Scott Morrison as proponents work to finalise the business case, due to be complete in about September.
Mr Morrison last week praised the project while at Beef Australia 2021, as he called for state government support on water infrastructure projects.
"I want to see the Hughenden Irrigation Project go ahead," he said.
"I'm passionate about this project, I think that's going to really open that part of the country and promote some great opportunities."
The federal government in 2018 committed $180 million to the project, which investigated the feasibility of building an off-stream storage dam on Saego Station, 45km north-west of Hughenden, to support 7500 hectares of irrigation enterprises,
HIPCo chairman Shane McCarthy said Mr Morrison's words were a vote of confidence in the project.
"It's good that the Prime Minister thinks it's one of the projects that needs to go ahead," he said.
Mr McCarthy said initial interest in water allocations during the first round of expressions of interest had surpassed expectations.
"We were hoping to get 60,000 megalitres of demand, we can provide around 80,000 megalitres," he said.
"The average amount of demand was about 230,000 megalitres."
Mr McCarthy said the project hoped to attract 40 to 50 irrigators to help reverse regional population decline.
A second round of demand assessment is underway.
State Water Minister Glenn Butcher said he has been briefed on the progress of the project.
"As I have said previously, I'm always happy to take a look at projects that have the potential to provide industry growth and job creation opportunities in regional Queensland and that stack up financially and environmentally," he said.
"I'm advised that the business case is due to be completed by the end of this year and we will consider it when it is presented to government."