In a major step for the only Island-based partnership in the race to develop offshore wind, Vineyard Wind won the right this week to negotiate a 20-year state contract to build an 800-megawatt wind farm south of Martha’s Vineyard.

One of three bidders for the state-mandated energy contract, Vineyard Wind now moves on to the next step in a complicated, years-long process: negotiating a contract with the state Department of Public Utilities.

Three developers were in the running for the state energy contracts.

The bid award was announced Wednesday. State officials said the bid was the lowest of three, although the amount will not be disclosed until negotiations begin with the DPU.

“It was the best project,” Massachusetts Secretary of Energy and Environmental Affairs Matt Beaton said.

Vineyard Wind is a partnership that includes Avangrid Renewables and the Danish company Copenhagen Infrastructure Partners, and Vineyard Power, the Island-based energy cooperative.

Three developers have been awarded leases to build utility-scale wind farms in federal waters about 12 nautical miles south of the Vineyard. All three were in the running for the state energy contracts, which are critical because they provide a way for wind farms to transmit electricity to consumers via the grid.

In a concurrent announcement Wednesday, state officials in Rhode Island said they would award a 400-megawatt project to Deepwater Wind, one of the three leaseholders and bidders on the Massachusetts contract.

The commonwealth contract is tied to a 2016 law signed by Gov. Charlie Baker requiring utility companies to buy 1,600 megawatts of power from alternative energy sources in the next decade. Secretary Beaton said the Vineyard Wind project wound up being ranked number one in a complicated evaluation process, partly because of its stated commitment to community benefits, including workforce training.

“A lot of folks on the Vineyard are well aware of the Vineyard Wind team creating their new home on the Vineyard, their commitment to wanting to make sure this first, largest-in-the-nation offshore wind development not only delivers in a cost effective way, but in a socially and environmentally responsible way . . . that really took it to the head of the crowd,” he said.

Judith Judson, Massachusetts Department of Energy commissioner, said Vineyard Wind appears best positioned to take advantage of federal tax credits, which are declining and expected to be phased out in the near future.

Closer to home there was cause for celebration among a small but passionate group of renewable energy advocates.

“We are ecstatic,” said Paul Pimentel, an Edgartown resident and board member for both Vineyard Power and Vineyard Wind. “We have been at this for over a decade and at times it’s been kind of a lonely fight,” he said.

“The way I see it, I feel like we’ve nudged the earth a little.”

As currently proposed, the Vineyard Wind project would generate enough electricity to power roughly half a million homes.

Mr. Pimentel said Vineyard Wind is also proposing an investment of some $10 million on the Island that includes workforce training at both the high school and college level and an operations and maintenance center tentatively planned at the Packer wharf on the Vineyard Haven waterfront.

If the wind farm development goes forward as planned, New Bedford, with its deepwater harbor, is expected to be the primary port for the industry.

“This is a pull ahead for the Vineyard,” Mr. Pimentel said. “With the contract structure in place and our relationship with the developer, we’re going to be able to buy some of the output and turn around and sell it retail to some of our [Vineyard Power] members which was always the plan.” He continued: “There are some things that still need to be put in place before that happens, but my goodness what a huge leap forward we took today.

“And there’s something even bigger going on here — the way electricity is produced, delivered, stored . . . is going through some rethinking in a national way . . . it’s a turning point.”

Secretary Beaton said the bids were evaluated by a team that included state utility companies Eversource and National Grid in what he described as “an incredibly robust process.”

He concluded: “This puts Martha’s Vineyard back in the spotlight for all the reasons we know — it is a place that is environmentally conscious . . . and now it has the potential to lead the way in creating clean energy for all of Massachusetts through offshore wind farms.”