"That limbo of not being able to decide what's happening is pretty traumatic. [When I found out about the scheme] I was completely relieved. It just made me feel better, sleep better," he said.

"You have many a sleepless night saying 'what do I do? Do I get out? How do I get out? What can I possibly do to move forward?"

The State Government's scheme is a $250 million voluntary purchase and demolition program for all NSW residential property owners with positive results for loose-fill asbestos insulation.

The program will offer eligible homeowners a choice of action - a NSW Government purchase of premises and land or of the premises only.

Currently, 19 properties in the Queanbeyan Local Government Area, including a block of units, have been identified as having loose-fill asbestos.

Mr Rigter, 29, owns one of the Queanbeyan units - in a block of 37 - containing the deadly fibre. News of the buy back scheme came as welcome relief to him.

"[Before] I felt I was completely dependent on other people. I can't buy a new place , I can't do anything you can do as a young person until such time as you've got this sorted," the financial statement auditor said.

"The banks won't touch you, you've got a negative asset that's worth less than what you've paid for it through no fault of your own. The [buy back scheme] gives me ability to move forward."

Mr Rigter said he would apply for the premises-only option as he believed being a unit, it would be too difficult to retrieve money for the land.

"It'll still be a long process ahead but at least it's a decision made and the Government's really come forward and helped us out," he said.

"We're moving in the right direction to getting it sorted, there was no way I could deal with it by myself."

Founder of Fluffy Owners and Residents' Action Group Brianna Heseltine was "elated" for Queanbeyan home owners - many of whom she said were worried to talk about the problem publicly for fear banks would foreclose their mortgages.

Currently there are more than 50 Queanbeyan homeowners who are part of the Group. However, Ms Heseltine anticipated more would come out of the woodwork especially with the NSW Government extending the free sample testing for asbestos program. The testing will be available across 26 Local Government Areas, including Queanbeyan, until August 1, 2016

"Now that people have the security of buy back scheme, it gives them a safety net," Ms Heseltine said.

"They don't have to be afraid or avoid a test in case it comes back positive because they have a buy back scheme in place.

"What's important primarily is that people focus on the health issue - this substance is highly toxic and...we know one fibre can kill. It's just not a risk you want to live with as a homeowner."

Member for Monaro John Barilaro was supportive of the scheme.

"This government has acted firmly and decisively to protect and support residents affected by loose-fill asbestos insulation, many of whom live in Queanbeyan," Mr Barilaro said.

"This will give them choice and allow them to properly plan for the future."

Queanbeyan Mayor Tim Overall described it as a "pleasing outcome" for Queanbeyan and other residents in NSW.

"The outcome has been a long time in the making, but I am very happy that we have arrived at a very fair outcome for the property owners," he said.

"Queanbeyan, along with the ACT, are the most affected areas by Mr Fluffy and this announcement will ease the uncertainty of property owners."