The NT Environment Protection Authority has given the green light to the $1.5 billion Project Sea Dragon's breeding facilities at Bynoe Harbour, subject to the imposition of six recommendations.
The EPA's assessment report will next be given to the Territory government for the final go ahead.
Once built and operational, the land-based prawn aquaculture project will have the capacity to produce more than 100,000 tonnes of black tiger prawns per year for export.
The farm, to be operated by WA firm Seafarms Group, is expected to employ 1500 people.
NT EPA Chairman Dr Paul Vogel says Seafarms must commit to improved water quality management and monitoring to protect populations of threatened and migratory species such as whales, dolphins, turtles and dugongs.
"By maintaining marine and estuarine water quality, the project is unlikely to cause a significant impact to the ecosystem health of Bynoe Harbour," he said.
Seafarms Executive Director Dr Chris Mitchell said protecting the environment is a core responsibility for the biosecure project which will create economic benefits for the region.
"This is the next step in establishing a viable new export industry in aquaculture for northern Australia," he said.
The breeding and maturation centres are to be located at Point Ceylon, 42km southwest of Darwin and already have a sacred sites clearance from the Aboriginal Protection Areas Authority.
The company's proposed production ponds at Legune Station, near the Western Australia border, still await Territory and Commonwealth ministerial approval and an indigenous land use agreement.
Stage 1 of the grow-out facility will produce approximately 14,000 tonnes of black tiger prawns per annum.
NT EPA's KEY RECOMMENDATIONS:
* Enhance water quality monitoring and management program
* Gain an environmental protection license for any potential waste transfer stations or incinerators
* Put in place Seafarms' publicly available environmental management plan (EMP)
* Independent audit five years after the project commences