Site facilities are being installed, with dredging due to start late next month or early September.

The project will almost double the port's capacity.

Sixty hectares of land will be reclaimed, enabling an extra five deep water berths of up to 16.5 metres to be added to the existing six berths.

Ports Minister Joe Tripodi said the land reclaimed from the bay would be available for fit-out for a new terminal by March 2011.

The first berths would available for trade from 2012.

Mr Tripodi said an international tender to select a stevedore to operate the terminal opened on July 1.

A spokeswoman for Sydney Ports Corporation said the dredging would not be a continuous operation.

One section would be undertaken, after which there would be a break before a bigger dredge arrived. No further details of the dredging could be given at this time, she added.

Botany Bay will be subjected to three separate dredging operations at the one time.

Dredging will also be carried out for the desalination pipeline from Kurnell to Kyeemagh and new high voltage electricity cables from Kurnell to La Perouse.

Mr Tripodi said the port expansion was necessary for the economic growth of NSW.

Costing $1 billion, it would be the biggest port expansion in the state's history.

``The opportunity to operate Sydney's newest terminal at Port Botany has already generated significant international interest,'' he said. ``I anticipate the field will be strong and extremely competitive.

``This is an exciting development for the economy. It will deliver 9000 new jobs to NSW and boost the state's economy by $16 billion in the next 20 years, an average of $800 million a year.''