Privately owned India Bore Diamond Holdings, which already has a project in the area, has been invited to apply for other tenements at the site.

The two pits at Ellendale, about 135km east of Derby, produced almost 1.3 million carats of gem and industrial-quality diamonds from 2002 to 2015.

The mine is famous for its fancy yellow diamonds.

More exploration will be required before operations can restart.

"It's not going to happen overnight, but restarting mining operations at the former Ellendale mine will be a high point in the rejuvenation of diamond exploration and mining in the Kimberley," Johnston said.

"It has taken 12 months to get to this point, but the state government's tendering process is highly confidential and very thorough, so it is pleasing to have the EOI process wrapped up.

"The Department of Mines, Industry Regulation and Safety has spent A$230,000, through the Mining Rehabilitation Fund, to ensure the site is environmentally safe, stable and non-polluting, and ready for a new operator.

"As part of its custodianship, the department consulted extensively with stakeholders including local government, Aboriginal interests, the police and pastoralists."

Gibb River shares are halted, but last traded at 2.7c, valuing the company at $4.84 million.