Yancoal Australia's shareholders can expect the sale of Rio Tinto's Hunter Valley arm, Coal and Allied, to be finalised this year after clearing the federal foreign investment review hurdle.
If successful, it will be the largest acquisition by a Chinese Government entity of Australian assets.
The Foreign Investment Review Board (FIRB) has given its tick of approval to the $3.2 billion (£2.55 billion) sale, announced in late January.
The transaction is reliant on a number of further closing conditions but is expected to be finalised by the third quarter of 2017.
Yancoal Australia, which already runs a handful of coal sites across the country, is owned by Chinese Government-controlled company Yanzhou Coal Mining.
The Coal and Allied sale incorporates a majority interest in several Upper Hunter coal mines including Mount Thorley, Warkworth and Hunter Valley Operations.