Environment Minister Sussan Ley issued a statement on Thursday afternoon approving the memorial's proposed expansion following departmental advice.

Ms Ley said a rigorous assessment of the changes had been considered against the building's heritage value and approval was given subject to strict conditions.

"In making this decision, I acknowledge the diverse range of community and stakeholder submissions made during the consultation period and the public interest in the project," Ms Ley said.

"I am satisfied the conditions of my approval will ensure the Australian War Memorial will continue to be an outstanding national museum and memorial that recognises and commemorates an important part of Australia's history."

There are 29 conditions the expansion will need to meet in order to "minimise and mitigate" the heritage impact on the site. Once that happens, it's expected the proposal will get the minister's final tick.

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Memorial director Matt Anderson welcomed the minister's approval of the expansion under the Environment Protection and Biodiversity Act.

"This is the first of three major approval processes required to progress the development, which aims to honour the commitment of the 100,000 Australians who have served our country over the past 30 years," he said.

The project still needs to receive approval from the parliamentary public works committee and the National Capital Authority.

The expansion would result in the existing Anzac Hall being demolished in order to build a larger facility that would host more of the memorial's collection. Some of that space would be dedicated to more recent conflicts, including those in Afghanistan, Iraq and Syria.

But the redevelopment has been one marred with controversy with a number of heritage and architectural interest groups slamming it for the negative social and physical impact it will have on the beloved institution.

The Australian Institute of Architects have waged a campaign to save the award-winning Anzac Hall and the institute's ACT chapter president Shannon Battison said it was a very disappointing result.

She said the process represented "an abject failure of government" to meaningfully consider the community's perspectives on the project.

"We should not be pulling down a building that has been so successful in its aim to pay respect to veterans," Ms Battison said.

To not consider Anzac Hall as part of the memorial's heritage, she said, dismissed the past 20 years and the memories among the veteran community created in the space.

She said there was now a dangerous precedent set for all of Australia's national institutions where processes to safeguard their heritage were ignored.

War Memorial expansion critic and Honest History website editor David Stephens said it had been inevitable the project would receive approval ever since Prime Minister Scott Morrison announced its funding.

"It annoys me as a former public servant that a project characterised by shoddy processes and overblown argument should have got this far," he said.

The federal government's own heritage advisor, Australian Heritage Council chair David Kemp, previously said he couldn't support the major redevelopment of the memorial.

"Physical expansion to support the display of large objects such as submarines and aircraft is not a sustainable intent over the long term and, in the current circumstances, cannot be achieved without significantly impacting listed heritage values," Dr Kemp wrote in a July submission against the proposal.

"Regrettably the council cannot support the conclusion that the proposed redevelopment will not have a serious impact on the listed heritage values of the site and recommends that the matters above be given serious attention."

The memorial will have to provide a final heritage impact statement to the minister for approval before its redevelopment can commence.