Eastern Australian Agriculture has held discussions with the federal Department of Environment about the proposal, which the government has rejected. The deal would also see Cubbie Station, which is in voluntary administration, continue to operate.

The offer is separate from a $100 million buyback tender the government announced last week for the Lower Balonne region - which contains Cubbie - to buy environmental water for the Murray-Darling basin.

The 92 gigalitres would come from water entitlements held by Cubbie, contingent on a successful bid by Eastern, and the nearby Clyde Station also owned by Eastern. Eastern would continue to operate Cubbie by rationalising some of its operations and investing in water-saving infrastructure.

Cubbie can hold up to 500 gigalitres of water - as much as Sydney Harbour - and has been earmarked by environmentalists as a property that is key to increasing flows into the Murray-Darling.

An adviser to Eastern, Ian Wiskin, said the unsolicited offer to the government was withdrawn last week because of the decision to open up buyback tenders in the Lower Balonne.

Mr Wiskin said the company would now look at the terms of the buyback tender, which opens today, to see if a similar outcome could be reached.

He said it was still prepared to negotiate a sale of water from the station outside the buyback.

''The danger is that the tender process alone, which is a blunt instrument, runs a risk of not providing an integrated solution for the environment and agriculture and 'throwing the baby out with the floodwater'," he said.

Eastern is negotiating Cubbie's sale. Its administrators, McGrathNicol, have received three bids for Cubbie, but none met the demands of creditors, who are owed $320 million.

Eastern is backed by overseas investment firms including the British company Ecofin, which specialises in renewable energy.

A spokeswoman for the Minister for Water, Penny Wong, said the government would not talk about commercial discussions. ''The Government will operate the … water purchase tender so as to achieve the best value-for-money entitlements for environmental use,'' she said.

The government has announced a package of $350 million to buy water in Queensland for the Murray-Darling.