The environment minister and climate septic, Greg Hunt, approved the 37,380-hectare Kevin's Corner project on Friday.
The mine, to be operated by a joint India-Australia consortium, GVK-Hancock, is the first to be approved since the introduction of a water trigger rule by the previous federal government.
Greenpeace claims Kevin's Corner will use more than 9bn litres of water a year and the Lock the Gate Alliance says more information on its impact on Galilee basin groundwater is needed.
On Monday, 13 water science experts urged Hunt to reject any mining proposals that would adversely impact water supplies.
They said mining and coal seam gas extraction could damage aquifers, rivers and water catchments.
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