The Australian Reptile Park on the NSW Central Coast came under fire from conservation groups in January for reportedly offering to rent koalas to people wanting to "impress guests" at events, hotels or homes.

Koalas in NSW are listed as "vulnerable to extinction" due to the native animals' declining numbers, and are known to internalise stress from being taken into unfamiliar situations like hotel rooms and people's homes.

At a NSW budget estimates hearing on Tuesday, Greens MP Cate Faehrmann quizzed Environment Minister James Griffin over what action had been taken to stop the "horrendous practice" at the reptile park, labelling it an "unacceptable situation".

"That's obviously not okay," Mr Griffin said.

The reptile park had been contacted, he said.

"I understand that they won't be proceeding to undertake that action, or provide that service anymore", he said.

Sydney's Taronga Zoo, meanwhile, had ruled out doing anything similar and had demonstrated care and support for koalas at the "highest level", he said.

"(It) does not participate in those particular practices."

The NSW government will consider whether law reform is needed to stop koalas being rented out by zoos and animal parks.

The Australian Reptile Park has been contacted for comment.

A previous NSW parliamentary inquiry found that koalas would lose their habitat and become extinct in NSW before 2050 without urgent intervention.

The government aims to double the NSW koala population by 2050.

In January, the federal government committed an extra $50 million over the next four years to pull east coast koalas back from the brink.

Australian Associated Press