Banerjee said the block located in Birbhum district has an inferred reserve of 2.1 billion tons, and would generate employment for one lakh people.
The work for the project would be completed in five years, and increase the earnings of both her state and the Central government, she said.
The Chief Minister, however, said her government would not rush through the project, but first rehabilitate around 4,000 people - 40 per cent of them tribals - residing in that area.
"We will not rush through the project, but rather take the people into confidence before commencing work," Banerjee told the media at the state secretariat Nabanna.
The assessment of environment impact and air pollution will begin after taking people into confidence.
The state government was setting up a committee under Chief Secretary Malay Dey to complete the initial survey and other work.
"Then I will speak to the people so that they can be taken into confidence," the Chief Minister said.
In June last year, the state government-owned thermal power producer West Bengal Power Development Corporation Ltd (WBPDCL) got the allocation of the Deocha Pachami Harinsingha Dewanganj Coal Mines for generating power from its five power plants having an aggregate generation capacity of 5,500 MW.
The state government had earlier said about Rs 60,000-70,000 crore of investments, both direct and indirect, would be required for the project and it may go up to Rs one lakh crore depending on the exploitation of the coal block.
The Deocha Pachami coal block was earlier offered jointly to West Bengal, Bihar, Punjab, Uttar Pradesh, Karnataka, Tamil Nadu and the Sutlej Jal Vidyut Nigam but subsequently, others had backed out of the asset allegedly citing cost and complexities in extracting the resources.
( With inputs from IANS )