The $2.5 million SA government payment to Henry Keogh after his 1995 conviction for the murder of his fiancee was overturned, will be investigated by a parliamentary committee.
The payment was announced last week, with Attorney-General Vickie Chapman saying it was the best way for the matter to be settled and to avoid further litigation.
But the state opposition has questioned the need for the payment and says crossbench MPs have now agreed to a Budget and Finance Committee inquiry.
The leader of opposition business in the lower house, Tom Koutsantonis, said the investigation would probe why the payment was made and how the government came to the $2.5 million figure.
Mr Koutsantonis said the committee would also seek the release of advice the government relied on in making the payment and would interview "every single public sector employee involved in this decision".
"So we know exactly why this payment was made, who supported it, who opposed it," he told reporters on Monday.
Mr Keogh, who has always maintained his innocence, served about 20 years of a 25-year non-parole period for the 1994 murder of 29-year-old Anna-Jane Cheney who was found drowned in the bath of her Adelaide home.
In 2015 an appeal court ruled that the jury in his second trial had been misled by pathologist Colin Manock and there had been a substantial miscarriage of justice.
A third trial was ordered but in November that year prosecutors decided not to proceed.
Attorney-General Vickie Chapman said Mr Keogh had contacted the previous government in May last year seeking an ex gratia payment recognising the length he had spent behind bars.
She said the current government took the view that settling the matter was the most appropriate course of action.