Co-developers Australian Offshore Energy and Copenhagen Infrastructure Partners will now be allowed to assess wind resources and seabed conditions at a site eight kilometres off the Victoria coast.
The Australian environment department said the developers would now be able to determine whether the planned , which was first proposed in 2012, is technically feasible.
Last month, the Maritime Union of Australia accused the government of dragging its heels on granting the licence due to an .
Announcing the grant of the exploration licence, the environment department said: "As this offshore wind farm exploration is an Australian-first, the government has carefully considered this proposal."
Star of the South would consist of 250 turbines installed in a 574km2 area off the Gippsland coast in Victoria, south-east Australia.
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