Located on the shores of Lake Victoria, the purchase was made on behalf of the participating governments in the Murray Darling Basin Commission by the NSW Department of Water and Energy.

And while water has been listed as a key reason for the purchase, MDBC acting chief executive, David Dreverman, says there are no irrigation water entitlements on the property.

"This is a strategic purchase from a willing seller that allows us to operate the Lake Victoria water storage in accordance with the conditions under the NSW National Parks and Wildlife Act 1974," Mr Dreverman said.

"Under that arrangement, the MDBC is required to manage the water levels and grazing pressures on the lake foreshore to maximise native vegetation and to reduce erosion.

"This protects significant numbers of Aboriginal burials and artefacts discovered when the lake water level was lowered in 1996."

Nulla Station is the third and largest Lake Victoria property the Commission has bought since 2002.

All properties were bought through the NSW DWE.

Mr Dreverman said Lake Victoria is essential to ensure efficient management of water downstream of the Barmah Choke (near Echuca), including South Australian irrigation and urban water needs.

"Vegetation around parts of the lake shore has suffered badly over time because of river regulation and stock grazing," Mr Dreverman said.

"Removing the stock grazing impacts on the two previously purchased properties in conjunction with other improvements have led to a spectacular vegetation response, particularly given the prevailing drought conditions.

"Nulla Station was the last remaining area of the lake where we did not have such a stock grazing management strategy."

Mr Dreverman said most of the Nulla Station land did not front Lake Victoria and much of it would not be required to protect the cultural heritage of the lake foreshore.

"The MDBC will eventually dispose of those portions not required after consultation with stakeholders," he said.