The company is producing hand sanitiser to help combat the COVID-19 pandemic.

The state government's fast-track approval will allow transformation of existing factory infrastructure and produce 120 megalitres of hand sanitiser grade ethanol and 1.5 megalitres of hand sanitiser

The approval for the local factory transformation is the government's latest fast-tracked project as part of its Planning System Acceleration Program.

Minister for Planning and Public Spaces Rob Stokes said as the Planning System Acceleration Program was a key part of the Government's COVID-19 Recovery Plan.

"It is fitting that the Shoalhaven Starches hand sanitiser proposal was fast-tracked," he said.

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"We are doing everything we can to protect the health and wellbeing of our communities as we battle through the pandemic, and the planning system is continuing to get projects out the door to keep people in jobs and the economy moving.

"The program has allowed construction to move forward on a range of transformative projects in a number of sectors - housing, transport, IT, education and commericial.

"While it was borne out of the pandemic, the aim is to make this program 'business as usual'."

The Bomaderry factory employs 300 people and has been in operation since 1979 processing wheat to produce flour, gluten, glucose, starch and ethanol.

As part of the project a boiler will be relocated to the eastern extent of factory site, with a larger footprint but smaller steam generation capacity, including a 24.5 metre emissions stack.

Existing gantry and associated steam pipework between the gas fired boiler and distillery will be expanded, while an two new 236kl tanks for storage for hand sanitiser grade ethanol will also be installed.

"This is an excellent example of a company adapting their business activities during the pandemic to meet demand," Kiama MP Gareth Ward said.

"Innovation like this will not only help to keep the community safe, it helps to keep the business profitable and keep people in the Shoalhaven employed."

This approval is part of Tranche 5 of the NSW Government's Planning System Acceleration Program, which has determined almost 90 projects worth more than $25 billion, creating opportunities for more than 50,000 jobs, 25,000 homes and 400 hectares of public space.