Western Australia's (WA) Premier Colin Barnett on Tuesday announced Kimberley Agricultural Investment (KAI), wholly owned by China's Shanghai Zhong Fu Group, as the preferred proponent to lease and develop 13,400 hectares into irrigated farmland in the state under the Ord-East Kimberley Expansion Project.

KAI plans to invest up to 700 million AU dollars ($728.91 million) in the next six years to establish a sugar industry in Kununurra in far northern WA, to annually produce about four million tonnes of cane and 500,000 tonnes of export sugar crystal.

KAI has indicated it would offer sub-leasing and share-farming partnerships with Australian growers on up to 20 percent of the new farmland, the Premier said.

Shanghai Zhong Fu's parent company is major Chinese construction group Shanghai Zhongfu Real Estate Co.

Barnett said the project was a key step towards the region reaching its full potential.

"This investment in large-scale agricultural industry and downstream processing will be the start of an exciting new era for the East Kimberley and northern Australia," Barnett said in a joint statement with WA Regional Development and Lands Minister Brendon Grylls on Tuesday.

Grylls said KAI was one of a number of companies which registered for the expressions of interest process.

"Today's announcement is a major milestone for the region's future," Grylls said in the statement.

Barnett told the radio networks of the Australian Broadcasting Corporation (ABC) on Tuesday that the major agricultural precinct in the Kimberley would produce hundreds of millions of dollars of agricultural produce every year.