The Department of Environment and Energy must formally assess and approve the development, as well as an adjoining extension of the Indian High Commission, because the projects were deemed to have a "significant" impact on the critically endangered golden sun moth.

The National Capital Authority's public consultation report said the two blocks of land, on Turrana Street in Yarralumla, and adjoining nature reserves contained a combined 3760 square metres of golden sun moth habitat.

The report said that habitat would be cleared if the developments went ahead and so required federal approval under the Environment Protection and Biodiversity Conservation Act.

An ACT government fact sheet said the clearing of native wallaby grassland was the main threat posed to the species' survival in the territory. It was mainly concentrated in 16 pockets across the city.

The moth's habitat had regularly featured in large-scale environmental assessments for development applications in Canberra, including the refurbishment of the Brickworks precinct and the construction of West Belconnen.

The land was leased to the Bangladesh High Commission in 1985, but the country's diplomats have been based out of a temporary chancery in O'Malley.

In 2015, the NCA hardened its stance on Yarralumla lots that had been leased to diplomatic missions but remained vacant for years.

Another crown lease was signed with the high commission in January 2015, before an official application was lodged late last year.

The development was expected to include an access road, new buildings and a security fence.

"The relocation of Bangladesh's temporary chancery from O'Malley to the main Yarralumla diplomatic precinct is a reflection of the importance Bangladesh places on its relations with Australia," the report said.

Meanwhile, the Indian High Commission lodged plans at a similar time to build on the land between its existing property and the proposed Bangladesh buildings.

Its preliminary environmental report said the new buildings were needed as the 36-year-old chancery's space had become "inadequate for the breadth and importance of the contemporary bilateral relationship".

"The land on which the new chancery development would proceed was allocated to India in a decision by former prime minister [Kevin] Rudd, reflecting the importance the government placed on bilateral relations between Australia and India," the report said.

The Department of Environment and Energy requested additional information from the NCA in January about the environmental impact and background of the site in order to make the assessment.

The area proposed for development sat between the embassies of The Philippines, Sweden, Poland and the United States, about 600 metres from Parliament House.

The two submissions will be open for public comment until Monday, June 26.