Global Switch will build a $300 million data centre adjacent to its existing facility near the Sydney CBD after securing planning approval from the NSW Government overnight.
Construction was expected to start in the second quarter of next year and run for 18 months.
It was expected to create 400 construction jobs and about 50 full-time permanent hires to run the centre.
The data centre operator said the new facility would have an on-site tri-gen system powered by a natural gas-fired energy plant, and would also harvest rainwater and recycle other water for use in its cooling systems.
Tri-gen systems allow some of the power demanded by the data centre to be generated within the centre itself. They also take the exhaust energy from the energy plant to generate further power.
The data centre would also try to achieve Leadership in Energy and Environmental Design (LEED) platinum ratings. The LEED system measures a building's environmental efficiency.
Global Switch executive chairman John Corcoran said he saw Sydney "as a logical choice to expand our presence in the region both because of the forward thinking and collaborative approach the government is taking and because of the rise in the demand for data centre space."
Global Switch was among five companies and consortiums to make a shortlist of potential data centre providers to the NSW Government in July.
"Sydney2 will provide a vital new data centre resource in Sydney, attracting new customers and providing a growth path for existing customers in Sydney1."
The past months were not all plain sailing for Global Switch. Tough new rules on access requirements in its existing facilities caused consternation among existing customers with at least one jumping ship to PIPE Networks' data centre.
Global Switch was not the only major data centre company to be building new facilities in Sydney. Rival Equinix said in June it would build a $72m first phase of a new Sydney3 facility, which was due to open next year.
And new market entrant NextDC - led by PIPE founder Bevan Slattery - was scoping data centre space in Sydney in the hopes of running a facility with up to 5,000 square metres of technical space.