New Zealand firm Contact Energy's (NZE:CEN) $1 billion geothermal power station in Taupo has been granted resource consent.

The company said in a statement on Wednesday it has received the final approval to proceed with Tauhara 2 geothermal development. The decision grants all consents applied for by the company in March this year.

Environment Minister Nick Smith said the construction and development of the geothermal power station will involve 350 jobs over the 33-month construction period.

Contact chief operating officer Graham Cockroft said "This is another milestone in our geothermal development programme and reflects both the technical strength of the application and a real focus on addressing issues during consultation."

"Both the submitters and Contact's willingness to work through issues saw all but two of the 60 submitters withdraw their submissions, achieving very positive outcomes for them and us.

"We were pleased with the outcomes and we have learnt a lot too. We are honoured to have had the opportunity to work alongside and develop our relationship with Ngati Tuwharetoa and the Tauhara hapu, and we value these relationships immensely."

Contact said the proposed Tauhara 2 geothermal development will proceed when market conditions allow. It will be built on farmland about 5.5km north?east of the Taupo township and would produce approximately 250 megawatts of electricity.