The major announcement was revealed on Thursday afternoon after cabinet signed off on the funds on Thursday morning, just three weeks after The Leader first reported speculation about the deal.

The government has signalled it could further protect the rich agricultural plains, confirming it has started negotiations with Chinese mining giant, Shenhua – a fact The Leader anticipated once the Caroona deal was done.

NSW Premier Mike Baird said on Thursday negotiations with Shenhua had commenced to secure the excise of the parts of its mining title that is close to the strategic agricultural land near Breeza.

While the government won’t confirm the exact figures, The Leader understands the buyback deal is worth $220 million – more than double the original exploration mining licence fee of $100m in 2006.

The Caroona buyback is a major people-power win for the farming community as well as local groups like the Caroona Coal Action Group.

Deputy Premier Troy Grant is en-route to the Liverpool Plains on Friday with Tamworth MP Kevin Anderson to share the news with local farmers.

"Labor recklessly issued this licence and it has taken the hard work of the NSW Nationals and our coalition colleagues to finally clean up Labor's mess,” Mr Grant said.

“The Liverpool Plains black soil is one of our most precious resources and today we have taken this major step to secure its long-term future.”

Mr Baird said the decision to buy back the Caroona licence was in line with advice from the NSW Planning Assessment Commission, which recommended the Government prohibit mining on the black soil plains.

“After careful consideration, the NSW Government has determined that coal mining under these highly fertile black soil plains, as proposed by Labor, poses too great a risk for the future of this food-bowl and the underground water sources that support it,” he said.

Mr Anderson said mining on the black soil of the plains was not an option. “I have continually said we need to protect the black soil and today the NSW Government has made that commitment to do so,” he said.