The government of New South Wales has indicated that it is moving to terminate its obligations to develop the coal mine in Cobbora.

The state government Treasurer said that government will no longer be obliged to develop the mine. He said that the government has unwound the "dud deal of the century" by concluding the agreement.

The mine at Cobbora located near Dunedoo in the state's central west was to be developed under the GenTrader agreement with Origin Energy as agreed by the previous government.

Treasurer Mike Baird has said that the project would incur a cost of more than $1.5 billion for development and the state government would become liable to pay $250 million in compensation if the project did not meet specified conditions relating to supplies.

The Treasurer is now planning to sell the Eraring power station and Shoalhaven Hydro power station to Origin for $50 million. The company has also agreed to conclude the agreement for a payment of $300 million. The net cost to the cost would be around $75 million.

"The Cobbora coal mine was a bad deal for the state and a bad deal for the environment," CEO of the Nature Conservation Council of NSW Pepe Clarke said in a statement.'