Australia’s third offshore wind zone has officially been declared off the western Victoria coast.

The federal government announced the 1,030-square-kilometre zone in the Southern Ocean would be located at least 15 to 20 kilometres off the coast from Warrnambool and Port Fairy in Victoria.

It said the zone could generate up to 2.9GW of offshore wind energy, or enough to power more than two million homes.

Zone size smaller than proposed

The area is just one-fifth of the originally proposed zone of 5,100-square-kilometres, spanning from Warrnambool to Port MacDonnell in South Australia.

The zone size was reduced after community consultation.

The declared area excluded the ecologically significant Bonney Upwelling and included a buffer zone to protect threatened marine life such as the southern right whale and migratory seabirds.

The area also avoided Deen Maar, a culturally significant island to First Nations peoples, major commercial fishing grounds, and key shipping routes.

Hundreds of jobs in pipeline

The new industry would create 1,740 jobs during construction and 870 ongoing operation jobs in Portland, the federal government said.

Climate Change and Energy Minister Chris Bowen said in a statement the zone had the potential to secure cleaner and cheaper energy for regional Victoria.

Feasibility license applications for offshore wind projects in the Southern Ocean zone are open until July 2.