Sydney Water has listened to the community and withdrawn its development application (DA) for a housing subdivision on a wildlife corridor at Woronora Heights on which koalas have been sighted.
The move, announced on Thursday, follows a community protest campaign which was launched in June 2021 and ramped up in October 2022 when the proposal was close to be decided by a planning panel.
Sutherland Shire Council passed a resolution on Monday night urging Sydney Water to reconsider.
Sydney Water's statement on Thursday said the withdrawal of the DA was "to show local residents their voices have been heard".
General manager of asset lifecycle, Paul Plowman said "working with the community is vital and, in this instance, not only have we listened to their concerns, but we have also reassured them by taking action".
"We want to thank the local community for providing feedback and raising concerns, which gave us an extremely clear representation of how the local and wider communities were feeling," he said.
"This is not something our team took lightly, and it is important for us to show the community that their concerns have been heard and taken on board.
"Giving back to the community is part of who we are at Sydney Water, and this allowed us to keep the residents and their concerns at the forefront while we conducted a final review of the application.
"We wanted to deliver the best possible outcome and after consulting with the council and the community, we would like to advise that the application to subdivide the land has been officially withdrawn."
Mr Plowman said, after initial concerns were raised about potential wildlife and flora and fauna being lost, Sydney Water conducted a detailed study of more than 500 hours including the use of recording devices and direct scientific methods of fauna detection as well as using an ecologist to specifically target koalas.
"I would like to reassure the community that if any of the studies we carried out had indicated there was going to be any kind of disruption to a koala colony or wildlife corridor, we would never have pursued the application from that point," he said.
The statement said Sydney Water conducts regular reviews of all its land holdings and often disposes of land which is no longer required.
"This enables Sydney Water to take the proceeds of any land sale and reinvest it into the repairs and maintenance of other assets which ultimately ensures our customers' water bills remain as affordable as possible," the statement said.