An artist's impression of the masterplan concept for the South Tralee site at Tralee.

An artist's impression of the masterplan concept for the South Tralee site at Tralee. Photo: Supplied

The federal's environmental watchdog reminded the developers of Tralee last week of their legal obligations.

Since then the Village Building Company has issued a statement saying it does not have to refer its development of 2000 homes on the NSW border south of Queanbeyan for federal approval.

The Canberra-based residential developer has won NSW government approval for rezoning the rural land, defying strident opposition from federal and ACT political leaders, who say the project will constrain Canberra Airport's future development.

Village referred Tralee to the federal government under environmental legislation two years ago, then withdrew documents. It is now relying on NSW approval for a smaller subdivision.

On Wednesday, Village said referral under the Environment Protection and Biodiversity Conservation Act was unwarranted. ''Any claims to the contrary are without foundation,'' Village said.

But a spokeswoman for the Department of Sustainability, Environment, Water, Population and Communities, said the department had been in contact with Village to remind them of their obligations.

''A referral for the revised proposed South Tralee development project hasn't yet been submitted. The department has provided the proponent with guidance as to whether the proposed project is likely to have a significant impact on a matter protected under national environment law.

''Projects likely to have a significant impact on a matter protected under national environment law, such as listed threatened species and ecological communities, wetlands of international importance and World Heritage areas, must be submitted to the federal environment department to see whether federal assessment and approval is needed.''