AGL said the closure marks a "major milestone" in its energy transition and a further step in the development of the company's proposed Hunter Energy Hub at the site.

"(Liddell) will be the first of AGL's thermal generation sites to be converted into an integrated, low-carbon industrial energy hub, which will support energy reliability and regional economic development," the company said in a statement.

AGL chief operating officer, Markus Brokhof said the closure of the first of four units at Liddell was a clear demonstration of the company's commitment to decarbonisation.

"We announced the retirement of Liddell in 2015 and seven years later we are pleased to be in a position to begin the orderly and responsible closure and transition of the power station in line with our climate commitments," Mr Brokhof said.

"As the power station nears the end of its technical life, we are focused on ensuring it continues to operate safely for our people while providing power reliably."

Mr Brokhof said the transition of the Liddell site into the Hunter Energy Hub will continue ahead of the site's full closure in April 2023.

"We are excited about our clean energy plans in the Hunter region, including grid-scale battery, solar thermal storage, wind, hydrogen and pumped hydro projects," Mr Brokhof said.

"We're committed to seeing this site continue its legacy as the backbone of the NSW electricity grid as we repurpose the infrastructure to continue delivering energy through the next phase of its life."

Mr Brokhof said the Liddell power station had played a significant role in powering NSW for more than 50 years as providing jobs and supporting communities across the Hunter Valley during its lifetime.

"Furthermore, our partnership with the Wonnarua Nation will be essential for repurposing the site at the Hunter Energy Hub and our joint aim to 'close the gap', as well as acknowledging the traditional owner of this land," he said.

"Many of our people at Liddell have dedicated their careers to delivering reliable energy to homes and businesses across Australia, and we are so grateful for their contribution."

AGL said the closure of the first unit will deliver an annual reduction in greenhouse gas emissions, the equivalent of taking around 400,000 cars off the road.

As part of its Hunter Energy Hub, AGL has already announced a memorandum of understanding with Fortescue Future Industries to explore green hydrogen, a 500MW grid-scale battery and a hydro power station at Bells Mountain.

Earlier this year, AGL also announced the accelerated closure windows for its remaining coal-fired power stations of Bayswater (2030 - 2033) and Loy Yang A (2040 - 2045).