Under the agreement with the NSW government, casino pokies duties will rise to 21.91 per cent in July 2024, but a marginal rate regime adopted by Victoria won't come in for seven years.
Star will be required to pay more tax as its revenue increases, Treasurer Daniel Mookhey said.
In return for the reprieve, the gaming group has agreed to guarantee 3000 jobs for the seven-year period.
Before losing the March election, the coalition made a snap decision to institute Victoria's scheme by July 1, levying duties of up to 60 per cent.
Mr Mookhey said internal casino data and independent assessment had shown that policy would have shuttered the casino.
"You can't collect tax from a dead business," he told reporters on Friday.
"We have carefully designed this arrangement to collect every dollar of available tax that Star can afford to pay."
Star Entertainment Group has faced several regulatory issues and fines exceeding $200 million in recent years after several inquiries in NSW and Queensland exposed illegal behaviour.
Negotiations with NSW's other casino operator, Crown, are ongoing.Â
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