The New South Wales government late Monday struck a "binding agreement" for the project to operate from November 2019 in a prime location on Sydney Harbour under strict conditions that included VIP gaming only and no slot machines.
Legislation will be introduced into parliament this week to gain official approval for Crown's casino and six-star hotel, although it also needs a green light from the Independent Liquor and Gaming Authority.
"We support this proposal because of its economic benefits to New South Wales," state Premier Barry O'Farrell said, adding that 1,300 jobs would be created during construction and 1,200 jobs once it was up and running.
"What Crown is guaranteeing is a minimum of a billion dollars (revenue to the government) over the first 15 years in operation. But their business case model suggests that figure will be far higher."
Billionaire Packer runs Crown, a worldwide gambling empire that already operates casinos in Melbourne, Perth and Macau and is planning complexes in Manila and Sri Lanka.
"The Crown Group is hugely proud and happy and thrilled," Packer told commercial radio Tuesday.
"We believe that Crown Sydney will help attract Asian high net worth travellers to Sydney, in particular from China, creating economic growth, extra taxes and over 1,200 jobs for the people of New South Wales," he said.
Packer's proposal involves building at the Barangaroo development site in the shadow of the Sydney Harbour Bridge.
Once complete, the city will have a towering 70-storey, six-star hotel - Sydney's first - and a VIP, invitation-only gaming resort that will be the first in the world with no slot machines, which traditionally account for a large slice of a casino's revenue.
Sydney already has one casino - The Star - but Packer has long said there was room for another.
He is targeting Asian high-rollers, particularly the growing ranks of wealthy Chinese, with China on track to overtake Britain as Australia's number two market for tourist arrivals this year. New Zealand is currently number one.