A Senior Australian of the Year finalist has been charged over a multimillion dollar fraud involving the country's top indigenous college in Queensland.

Former Djarragun College principal Jean Illingworth, 65, was charged with fraud on Monday for allegedly providing incorrect enrolment numbers to obtain up to $9 million in taxpayer funding.

Police investigated after a complaint was lodged in 2011 by the Non-State Schools Accreditation Board.

They allege Illingworth dishonestly obtained approximately $3.5 million from the state government and $5.4 million from the commonwealth government between 2008 and 2011.

Queensland Department of Education, Training and Employment director-general Annette Whitehead says the state government is looking at options to recoup any inappropriately claimed grants paid to Djarragun College Limited.

"There is a clear expectation that funds paid to external bodies in excess of entitlement, will be repaid in full," she told AAP.

The federal Department of Education, Employment and Workplace Relations wouldn't comment on the charges, but told AAP it's been in regular contact with the school to determine repayment options "that will minimise any adverse impact on staff, students and the community".

"We are working closely with Queensland government to resolve this matter," a spokesman said.

Illingworth was named Queensland Senior Australian of the Year in 2009 for her work in transforming the once dysfunctional college into a much admired model of success.

Indigenous leader Noel Pearson once described her as a true social entrepreneur.

Cairns detectives have charged Illingworth with one count of fraud (dishonestly induce to deliver property) under the Queensland Criminal Code.

She's also facing one count of obtaining financial advantage by deception under the Commonwealth Criminal Code.

Illingworth is to appear in Cairns Magistrates Court on January 31.