The Land Development Agency appealed the independent council's ruling at the ACT Civil and Administrative Tribunal after the council originally proposed to protect a much larger area.

The chairman of the ACT Heritage Council, Duncan Marshall, said the LDA proposed a new residential development for the site and registering a larger portion of the land would cost the government millions.

''There was an appeal by the LDA … Council had registered the yard area plus a length of track, the LDA appealed that on the basis that it didn't meet the significance required and they were concerned about the effect on their development proposal,'' Mr Marshall said.

He said negotiations were like a development applications process: ''Council has the ability to agree to these sorts of outcomes in a development application context.

''In the end we settled with the LDA and agreed to a smaller boundary which kept the railway goods yards plus a shorter section of the railway line and that area is going to be conserved … Another section will be retained as a visual corridor.''

He said the proposed development would be a residential estate of about 900 dwellings including free-standing homes and units.

The council has recently had two of its decisions overturned by the tribunal and, when it ordered the heritage registration of the Expansion Mural at the Canberra Rex Hotel be rescinded in July, it said the council was interpreting heritage legislation incorrectly.

''We think we've got a reasonable outcome,'' Mr Marshall said.

The change to the registration of the Yarralumla Brickworks Railway Remnants was published on Tuesday with eight other decisions of the council.

One decision related to trees that no longer exist; three others were places and buildings over which the council has no jurisdiction. Mr Marshall said the council was still working on clearing a backlog of about 150 applications.