Western Australia is set to receive a windfall of up to $350 million from both BHP Billiton Ltd and Rio Tinto Ltd as the two giant mining firms' proposal of integrating their iron ore operations in Pilbara won the nod of the state parliament.

The two companies said on Friday that a joint one-off payment of $350 million would be transmitted to the Western Australian government as soon as the deal has been finalised, which would facilitate for a streamlined iron ore mining in Pilbara and would see the construction of rail networks and infrastructures that the firms would share.

WA Premier Colin Barnett said that the passage of the new legislation would pave the way for the amendment of 11 existing state agreements to permit the integration of the iron ore mining activities of BHP and Rio Tinto in the state.

Also, the legislation calls for the million-dollar payment which both firms have agreed to make as soon as the bill receives the necessary royal assent.

The approval came following the earlier legislation in August this year of a related bill that facilitated royalty payments from both mining giants, which Mr Barnett said amounted to some $1.5 billion, with resulting 17000 jobs generated by the two firms' combined mining operations in Pilbara.

The new agreement would also allow the construction of a new rail spur leading to the Solomon projects owned by Fortescue Metals Group, in conjunction with The Pilbara Infrastructure (TPI).

Mr Barnett said that the agreement would expand the Solomon project's existing rail and port infrastructure to prepare the site for the introduction of new mining projects, which would attract additional investments of up to $4 billion.

Upon completion and once fully operational, the extended Solomon projects should achieve an annual capacity of 60 million tonnes of iron ore that could potentially deliver some $300 million to the state treasury in the form of yearly royalty income.

Mr Barnett is also optimistic that the new agreement would encourage the entry of more junior miners in Pilbara as more opportunities would be spawned by the region's upgraded infrastructures and transport facilities.