The University of Wollongong's (UOW) Shoalhaven and Bega campuses will use 100 per cent renewable energy generated from the Shoalhaven Community Solar Farm.
The agreement to source power from the solar farm at Nowra Hill is the first step towards bringing the university to 100 per cent renewable energy across all its campuses.
Chair of UOW's Sustainable Futures Committee, Professor Tim McCarthy, said it was important the university showed it was possible to run a large organisation using carbon-neutral power sources.
"This agreement is a true South Coast collaboration and represents the first major step," he said.
"The solar farm is a community based initiative to create the largest solar farm in our region.
"Keeping our energy dollars in the region gives us satisfaction and having it at the doorstep of our Shoalhaven campus is perfect alignment."
The $5 million Shoalhaven Community Solar Farm is set to come on line by the middle of December.
Co-developed by Repower Shoalhaven and the Melbourne based energy retailer Flow Power, the first solar farm on the South Coast, consists of 8000 solar panels on 10 hectares of land.
It will generate three megawatts a day, enough to power around 2000 homes a year and more than 6000 megawatts of clean energy a year.
Already 20 per cent of the project's output has been purchased by the City of Sydneyas part of their renewable energy power purchase, while the rest will be offered to other Shoalhaven businesses.
Repower Shoalhaven chair Walter Moore praised the UOW for showing strong support for sustainability and its community values.
"The support from institutions and businesses like the university is important to underpin the development of further clean energy projects in the region as we strive to move away from a carbon based economy," he said.
The Shoalhaven Solar Farm is expected to start providing power to the University's Shoalhaven and Bega campuses, as well as the Graduate School of Medicine accommodation in Nowra from early next year.
Construction on the 8000-panel farm started in July and is the culmination of a four-year plan by community solar investment group, Repower Shoalhaven.
The solar farm is on land owned by Shoalhaven City Council, which has granted a 30-year-lease on the property.