A single‐channel high information rate free‐space optics transmission link is presented incorporating in‐phase quadrature modulator‐based polarization multiplexed‐256‐quadarature amplitude modulation scheme. An information rate of 160 Gbit/s with 10 Gbaud symbol rate is achieved for free‐space information transmission. Advanced digital signal processing techniques at the receiver along coherent detection have been used to compensate the losses incurred by the information signal propagating the free‐space media. The transmission performance of the proposed link has been enhanced by using different optical amplifiers, that is, Erbium‐doped fiber amplifier and semiconductor optical amplifier, and their performance has been compared. The link performance is analyzed for required laser line width, launch power requirements, increasing transmission range, increasing beam divergence angle and optical power required at the receiver. Bit error rate and error vector magnitude metrics have been used to analyze the link performance. A maximum transmission of 3.9 km for clear weather atmospheric conditions is achieved. The proposed link has the potential to meet the last‐mile access needs and to provide high‐bandwidth high‐speed information links required for future fifth generation wireless communication and Internet of Things applications.