The $300 million development is a joint venture between Infigen Energy and Suntech Australia.
The development has been funded as part of of the $1.5 billion Federal Government 'Solar Flagships' Program.
Fifty-five jobs will be created during construction and the project will provide five full-time positions.
Nyngan mayor Ray Donald says it's a significant investment for the town.
"The flow-on effect through the businesses of wages is also very positive for us.
"I think the other thing about it though, is that it's a step towards major solar power, which must be a good thing for state-wide electricity at a time when there's threatening to be increases in prices.
"And I hope this can make a positive step towards controlling some of those increases."
The company says the solar farm will generate enough power for 20,000 homes and will reduce greenhouse gas emission, equivalent to taking 30,000 cars off New South Wales' roads.
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