The New Acland coal mine is set to restart after the Queensland government approved a key part of its plan. 

The Queensland Department of Regional Development, Manufacturing and Water has approved the water licence for New Hope Group's Stage 3 development of its New Acland coal mine near Oakey, about 150 kilometres west of Brisbane.

For more than a decade, New Hope Group has been seeking approval to expand the mine's production to up to 7.5 million tonnes per annum for another 12 years, but has faced extensive legal challenges.

Mining at the site stopped in November last year, when coal reserves were exhausted.

But work will soon start again, after the department imposed 35 conditions on a new licence, including managing the impacts on aquifers and running monitoring programs.

“The department considered matters such as public submissions, potential impacts to existing water users … before granting the associated water licence with strict conditions,” a department spokesperson said.

The Oakey Coal Action Alliance - which has opposed the mine's expansion due to the effect it would have on neighbouring farmers - says it is disappointed with the decision.

New Hope Group says any future challenges will have to be between objectors and the state government, as it has now granted the approvals.