Australian Gas Light Company (AGL) on Thursday signed an agreement with New Zealand renewable energy company, Meridian Energy, to build the largest wind farm in the southern hemisphere in Victoria of Australia.

The 1 billion dollars (0.9 billion U.S. dollars) 420 MW wind farm will be located near Hamilton, 260 km west of Melbourne and is due for completion in early 2013.

It will have the capacity to power more than 220,000 average Victorian homes and abate more than 1.7 million tonnes of greenhouse gases each year, the equivalent of taking more than 420, 000 cars off the road, AGL Energy said.

AGL and Meridian will each fund 50 percent of the capital cost of constructing the wind farm, to feature 140 Vestas V112-3.0 MW wind turbine generators, which will be constructed by a Vestas/ Leighton Contractors consortium.

AGL chief executive Michael Fraser said the joint venture project would deliver significant benefits for both renewable energy developers.

"As a result of utilizing Vestas' new 3.0 MW V112 turbines, we have been able to increase the capacity of the wind farm, while reducing the number of towers from 174 to 140," Fraser told The Australian newspaper on Thursday.

"This reduces the environmental footprint of the project and achieves substantial operating cost savings in excess of 30 million dollars (26.9 million U.S. dollars) over the life of the wind farm."

AGL said about 400 direct jobs and 800 indirect jobs would be generated during construction. The wind farm would employ 30 full- time staff for 25 years, following construction.