The Swedish company will provide equipment mainly for the Hunter's mining and construction industries from its new 16-hectare site.
The business will include 28,000m² under cover and will be operated by 600 employees and contractors.
Parliamentary Secretary and Junior Climate Change Minister Mark Dreyfus officially opened the plant.
Sandvik has approval to expand by an additional four-hectares when required, which would create a further 150 jobs when 24-hour construction starts.
Sandvik president and chief executive officer Olof Faxander estimated the plant would generate between $200 million and $300 million(€156 million to €234 million) for the Hunter economy.
"The company is strategically bringing together its operations in the coal and manufacturing supply chain to deliver major economic benefits to the industry and the community," Mr Dreyfus said.
"This is a smart investment taking advantage of the resources boom and supporting local jobs growth."