Milk processor, Murray Goulburn, will invest $60m in a new milk processing facility in western Sydney.
The company bought a 5ha site, formerly a quarry site, in Erskine Park.
Devondale general operations manager, Keith Mentiplay, said work on the site would begin soon.
"There is just over one year to go before we are scheduled to begin production and we are well on track to becoming the nation's most efficient producer of daily pasteurised milk," he said.
Earlier this year Murray Goulburn announced it planned to build two new facilities, with work already underway at the new Victorian plant at Laverton.
In April the company hinted it would be enlisting new suppliers throughout Victoria and entering new supply region to help meet the requirements of a landmark deal with supermarket giant Coles.
The deal, said to be worth $2 billion, will see Murray Goulburn supply Coles with house-brand milk for 10 years.
The deal includes the NSW-based cooperative Norco. The two cooperatives will replace house brand-suppliers Parmalat and Lion in these states.