DCI's SYD02 data centre in Eastern Creek will be close to other important data centres and connectivity hubs for low-latency access.
Designed for hyperscale cloud, content and managed service providers, SYD02 should go into service in the fourth quarter of 2022.
The plans include new cooling technologies that the company says will set industry-leading benchmarks for water and energy efficiency.
SYD02 is designed to be Zone 3-5-ready, with physical security and Tier III resilience.
"The team are delighted to have secured this approval which will be a crucial part of our three-stage strategy for this key site," said DCI CEO Malcolm Roe.
"We are also very excited to be leading the industry in delivering new cooling technologies to significantly enhance our power utilisation effectiveness and minimise our impact on the environment."