Gippsland's coast in south Victoria will be home to the turbines with the heavy winds of the Bass Strait offering plenty of wild weather to power Australian homes.
The area covers about 15,000sq kilometres offshore, and runs from Lakes Entrance in the east to south of Wilsons Promontory in the west.
It's expected the projects could support more than 3000 jobs over the next 15 years in development and construction phases, and an extra 3000 ongoing operation jobs.
Climate Change Minister Chris Bowen made the announcement alongside his Victorian counterpart Lily D'Ambrosio and Industry Minister Ed Husic.
Mr Bowen said Gippsland's declaration was a crucial step towards affordable, reliable and secure energy and new economic opportunities for Australia.
"Australia's new offshore wind industry will start in Gippsland," he said.
Environmental advocates Friends of the Earth said the development of Gippsland's offshore wind sector would be a game changer for the state's efforts to tackle climate change and create thousands of new job opportunities.
"Offshore wind will pump a huge amount of new, renewable power into the grid ... that's good for power prices, it's good for jobs, and it's good for the environment," campaigner Wendy Farmer said.
The Star of the South offshore wind farm project has also been granted major project status which will reduce unnecessary regulatory delays.
Mr Husic said this project alone would support more than 2280 jobs during construction and an extra 300 direct jobs in operation.
The head of Flotation Energy, the company developing the Seadragon offshore wind project, said the announcement would drive further investment in renewable energy.
"We are ready to go and the announcement that licence applications will soon open is a very welcome step that we have been waiting for," managing director Tim Sawyer said.
"This announcement will further ignite the industry and the supporting supply chain to double down on investment and development."
The announcement follows consultation across the region, with the federal government working with the Victorian state government and local Wellington Shire Council.
Community concerns saw the original declared areas shrunk to a combined total of 15,000sq km with a 10km buffer zone from the shore to limit the visual and environment impact.
The future farms would be hooked into energy grids on the mainland in Gippsland and La Trobe Valley, with the potential to provide 10 gigawatts per year of wind power.
Mr Husic wants to see more large-scale projects built to help integrate renewable energy with Australia's manufacturing industry.
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