Planning Minister Anthony Roberts on Wednesday unveiled the Cumberland Plain Conservation Plan covering Sydney's Western Parkland City.
That region encompasses the Blue Mountains, Camden, Campbelltown, Fairfield, Hawkesbury, Liverpool, Penrith and Wollondilly local government areas.
The government said the plan would accelerate construction of more than 73,000 homes across 11,000 hectares by providing biodiversity approvals up-front.
"Having those approvals in place from the get-go for landholders will result in more homes being built faster," Mr Roberts said in a statement.
"This is one of the largest strategic conservation plans to be undertaken in Australia, setting the standard for streamlining development processes in growth areas without sacrificing essential conservation considerations."
The plan took in advice from the NSW chief scientist and engineer on protecting koala populations.
Measures include establishing koala corridors, restoring habitat, installing exclusion fencing and building two crossings on Appin Road in Sydney's southwest, the government said.
A dedicated koala reserve is also in the plan, protecting and restoring up to 1830 hectares of koala habitat along Georges River, it said.
Environment Minister James Griffin said the plan would also help ensure long-term protection of rare endemic species such as the Cumberland Plain land snail.
"The plan has now been submitted to the Australian government and, if approved, federal biodiversity approvals will be provided up front as well to reduce the administrative burden on local development," he said.
Planning in western Sydney recently came under fire from scientists warning disease-free koala populations were put at risk by a new housing estate near Campbelltown, which they claimed lacked environmental safeguards.
The state government earlier this year announced a nearly $200 million spend as part of its NSW Koala Strategy to boost habitat conservation, remove threats and build knowledge on the tree-dwelling marsupial which is now endangered.
Labor planning spokesperson Penny Sharpe said it was crucial the plan worked, as failure would have serious consequences for fauna like the Campbelltown koalas.
"We know that the local community who are trying to protect that population will be looking very closely at the detail," she told AAP.
"There are significant concerns that while the words are there the actions are lacking. Bio-certification process is very important but ultimately if it leads to the decline of koalas, we've failed."
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