Australia's largest supplier of dairy products is set to change hands as a A$280 million (¥1.3 billion) deal with a Chinese company was approved by the government on Tuesday. 

The Tasmanian Land Company (TLC), which owns the Van Diemen's Land Company (VDL), will be sold to Moon Lake Investments, a Chinese company owned by billionaire Lu Xianfeng, Australia's Treasurer Scott Morrison confirmed on Tuesday. 

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"This will guarantee more than 140 local jobs, generate an intended additional investment of over $100 million and an expected additional 95 jobs. Moon Lake has given guarantees that all current VDL employees will be offered ongoing employment with Moon Lake on terms no less favorable than their current employment arrangements," Morrison said in a statement. 

The Foreign Investment Review Board (FIRB) approved the sale given that Moon Lake's investments in Australia complies with the Australian Taxation Law. Morrison added that the national interest test, which looks at the sale's positive impact on the workforce and the country's economy, added to the favorable decision. 

VDL's dairy farms are located in Northwestern Tasmania, which will receive more economic activity with Moon Lake's additional investment projects in VDL's farms. According to Morrison, Moon Lake will continue to supply milk and milk products in Australia.  

VDL produces more than 8 million kilograms of milk solids a year. 

"The land on which VDL operates has important cultural and natural heritage considerations. Moon Lake has committed to honor the terms of all environmental and cultural agreements entered into by VDL, including with the local Aboriginal community," Morrison said. 

Tasmania's senator Eric Abetz welcomed the decision, saying that it shows Tasmania is open for business. 

"Tasmania has turned the corner on economic recovery courtesy of State and Federal Liberal Governments, this is just another notch in Tasmania's belt which will help to put us on the map," Abetz said.

TagsVan Diemen's Land Company, Moon Lake Investments, Lu Xianfeng, Australia China partnership, tasmania