Johannesburg - The government said on Tuesday that exploration for shale gas will begin in the next 12 months, ending years of speculation over the project.
South Africa's semi-desert Karoo region is believed to hold at least 485 trillion cubic feet of shale gas, but drilling has been delayed by environmental and economic concerns.
"One area of real opportunity for South Africa is the exploitation of shale gas," the government said in a statement.
"Exploration activities are scheduled to commence in the next financial year."
The government has said that shale gas could be the answer to the country's energy challenges, as coal-fired power stations battle to meet the rising demand for electricity.
But the process of fracking used to capture the gas has been opposed by environmentalist who argue that it has the potential to poison the Karoo's underground water supply.
Fracking involves digging wells up to four kilometres (2.5 miles) deep, before pumping in a cocktail of water and chemicals to crack the shale rock and release the gas.
In 2012, the government lifted an 18-month moratorium on hydraulic fracturing to weigh the environmental and economic implications of the process.
Anglo-Dutch energy firm Shell is one of the companies that have shown interest in the gas exploration, and have expressed concern at the lack of progress in the project.
The company had said it planned to spend $200m for the first exploration phase of six wells if granted a licence to drill.