Obama administration Interior Secretary Ken Salazar also said his department also was trying to speed up the process for issuing renewable energy leases. Wind projects off the coasts of Maryland, Delaware, Virginia, and New Jersey are being studied.
"There are a number of developers who are very interested in developing offshore wind here and our goal is to hold the auctions and be able to issue the leases now, in 2012," Salazar said. "So, this is not something that's going to be waiting around."
The Mid-Atlantic lease proposal follows the Cape Wind project in Massachusetts that was given the go-ahead in 2010 after years of federal review. That project is still in development and Salazar said the department had learned from that experience.
"No developer should have to wait nine or 10 years," for approval, Salazar said.
Dominion Virginia Power said that it is interested in building up to 400 wind turbines in waters about 20 miles off Virginia Beach, but the cost of the power was an issue. The 2,000 megawatts the turbines could produce would generate enough power for 500,000 households.
"If everything aligns and it makes good sense and we have our regulators on board, yes, we would be moving forward on a wind farm," senior vice president Mary Doswell told The Associated Press.
The Interior Department said before the waters would be opened, the public would have a chance to comment on the projects.
Maryland Gov. Martin O'Malley, who appeared at the announcement with Salazar, said his administration had contacted Defense Department officials to discuss the possibility of the military using offshore wind energy.
O'Malley, a Democrat, and Salazar both described the decision as a major step forward for offshore wind, and environmentalists agreed.
Environment America Clean Energy Advocate Courtney Abrams said "tapping into the power of offshore wind along the Atlantic coast is vital to getting the region and the nation off fossil fuels without creating more pollution."
Sen. Tom Carper, D-Del., said the decision "just makes sense."
"It is a reliable, clean energy resource that will reduce our dependence on fossil fuels, curb harmful air pollutants, and create good paying American jobs in manufacturing and construction," Carper said.
Jim Lanard, president of the OffShore Wind Development Coalition, said the decision means that a lengthier environmental impact assessment for offshore power along the mid-Atlantic won't have to be conducted, although reviews for individual projects will still have to be done. Lanard said that could shave two years off the review process.
Michele Siekerka, the Assistant Commissioner of Economic Growth and Green Energy in New Jersey's Department of Environmental Protection, said Thursday's announcement will speed the building of offshore turbines by a year or more.
Eleven developers have submitted proposals totaling 12,000 megawatts and are expected to be able to bid later this year for leases. The companies will still have to do environmental studies of their own areas, but could be producing power by 2016 or 2017, she said.
"The key is the federal government is not doing another one," Siekerka said.
Lanard said legislation pending in the Maryland General Assembly could do a lot to entice developers.
"If there's a revenue stream, you'll see a great deal of interest," Lanard said.
Lawmakers killed a bill last year that would have required utilities to enter into long-term power purchase contracts and O'Malley said it wasn't clear how a toned-down bill would fare this year.
Kit Kennedy, Clean Energy Counsel at the Natural Resources Defense Council, said offshore power holds the promise of clean energy that could also provide jobs, but it would watch the process carefully to make sure the environment is protected.
Dominion's Doswell said absent tax credits, power generated by towering wind turbines costs about 28 cents per kilowatt hour, while the state's largest electric utility's rates are now in the range of 11 to 12 cents per kilowatt hour.
"So that's what we're battling," Doswell said. "Wind is a great resource and you can do it with scale, but we've got to work on this cost equation."
Associated Press Steve Szkotak in Richmond contributed to this report..