A planned Cooma assembly plant for the massive infrastructure project has been proposed for a section of land used by the endangered grassland earless dragon.

Earless dragons were found from Canberra to the Victorian alps and were once believed to be one species. But researchers recently discovered they are all distinct species.

This made the dragons found in the Cooma region one of four distinct species and, along with the Canberra variety, one of two dragon species likely to still be alive.

The Victorian species has not been spotted in 50 years and is likely extinct, likewise the Bathurst species has not been seen in 30 years.

Proposal documents from Snowy Hydro noted there had been 71 records of the dragon within 10 kilometres of the site.

Colong Foundation director Keith Muir said the plant should be built elsewhere.

"They must avoid the habitat at all cost," Mr Muir said.

"You're only ensuring the extinction of the animal."

He said the habitat couldn't be environmentally "offset" because of the rarity of the lizard.

The proposed 32-hectare site would be built on grassland in Cooma's east and used to assemble machinery and infrastructure for Snowy Hydro.

If given the green light, construction would begin in March next year and be finished in five months.

The finished site would employ 125 people for three and a half years, manufacturing more than 130,000 segments for the tunnels planned for Snowy Hydro 2.0.

It would run for 24 hours a day, seven days a week, according to documents.

Snowy Hydro 2.0 will create storage capacity for the massive hydro energy plant, creating tunnels from the Tantangara reservoir to the lower altitude Talbingo reservoir.

This would allow the plant to pump water downstream, creating energy during peak demand, then pump the water upstream when demand was low to replenish the Tantangara reservoir.

Because it had been declared "Critical State Significant Infrastructure", Snowy 2.0 did not need development consent but was required to prepare an environmental impact statement for approval by the NSW Planning Minister Rob Stokes and federal Environment Minister Sussan Ley.

The site is also potentially home to the endangered striped legless lizard, the vulnerable pink-tailed worm lizard and the button wrinklewort, an endangered native flower.

Native grassland on the site is the preferred habitat of the dragon.

Other sites for the construction of the plant were proposed, including a site inside Kosciuszko National Park and in Canberra.

But the Cooma site was chosen because it minimised travel distance for raw material supply, reduced the amount of land needed in Kosciuszko and would provide local jobs.

"All feasible options and alternatives will be identified and documented within the [environmental impact statement]," documents read.

Snowy Hydro chief executive Paul Broad said an environmental impact statement would be lodged with both the NSW and federal governments by September.

The proposal document will be open for public comment shortly after.

"Planning and environmental approval for the segment factory is needed as soon as possible from both [ministers]," Mr Broad said.

Mr Broad said there had already been local support for the jobs it would bring to the area and the factory was needed to ensure segments are ready by mid-late 2020.

Documents lodged with the NSW planning department said because the factory might have a significant impact on a natural site, it was "likely to be a controlled action by the Commonwealth Minister for the Environment".

The proposal was lodged with both the NSW planning department and federal environment and energy department.