The Swedish and German utilities will invest a total of SEK 11 billion (EUR 1.2 billion) in the project.
The developers also confirmed Sandbank will use 72 Siemens SWT-4.0-130 turbines and construction is planned to start in the summer of 2015. The German turbine manufacturer has also signed an initial five-year servicing deal for the turbines.
Vattenfall, which owns 51% of the project, will invest SEK 5.6 billion into the development.
It is located 90 kilometres west of the island of Sylt, near the 288MW DanTysk site, also being developed by Vattenfall and Statdwerke München.
Swiss firm ABB has been contracted by connection specialist Tennet to supply an AC power transmission link from the Sandbank site to the 864MW SylWin Alpha offshore HVDC converter station.