The Australia government is considering opening up land for farming in northern Australia as part of a deal to export food to China.
The ABC reports a joint study with the Chinese government into the proposal is expected to be released within months.
Trade Minister Craig Emerson says the plan is designed to lift Australian food production for world markets.
Some sites under consideration are the Ord River in Western Australia and the Atherton Tableland in Queensland.
Liberal Senator Bill Heffernan says the plan is an attack on Australia's sovereignty and there would have to be big changes in the law for the plan to go ahead.
''This is not xenophobic ... this is a decline in the meaning of sovereignty," he said.