An agreement in principle has been reached between Black Lake First Nation and SaskPower.
Under the proposed deal the Elizabeth Falls hydroelectric power project would be built adjacent to the Fond du Lac River.
Chief Rick Robillard says construction and operation of the power production facility would provide many jobs for band members.
It is the first facility of its kind in Saskatchewan to be built largely on First Nations land.
Review and assessment of the project must be completed before it can go ahead.
If that happens, construction on the 300-million dollar project could begin in the second half of 2014.