Premier Colin Barnett said the successful tender was a partnership between Leighton and Indigenous Business Australia.

IBA would build the 19km of irrigation channel, a 13km road extension and irrigation control structures as part of the $220 million project.

"The joint venture has significant experience in managing construction projects of this scale," Mr Barnett said.

The Premier said the four shortlisted proponents were assessed on evaluation criteria, including their proposed Indigenous and community development programs. The contract process and evaluation was managed by LandCorp.

He said expanding the Ord River into a world-class agricultural precinct was a key election promise in 2008.

"On completion, the project would ultimately double the Ord irrigation area to 28,000 hectares, with the first release of the new agricultural blocks, following environmental approvals, expected by 2011-12," he said.

Regional Development and Lands Minister Brendon Grylls said the criteria showed the state government's commitment to improving the social and financial well-being of local Indigenous people as a result of the project.