The report commissioned by the Sydney Basin Koala Network says development approvals have caused significant habitat loss, compounding the effect of droughts, fires and floods, and put the cuddly national icon in imminent danger of extinction.

Total Environment Centre director Jeff Angel says the Sydney basin koala population has plummeted 22 per cent in two decades.

"Local and state environment and planning laws are failing our koalas," he said.

"Areas with the most significant koala populations are not being protected from development and other threats, despite their looming extinction."

Regulatory gaps in state planning and environment laws did not consider the cumulative impact of land development across the state, Mr Angel said.

As habitat loss has exacerbated in the regions, urban areas have become integral to koala population recovery.

But metropolitan Sydney poses its own set of dangers.

Stress-induced disease, vehicle strikes, habitat fragmentation and dog attacks are significant killers in the 'koala corridors' between regional NSW and the city suburbs.

Ecologist Amanda Lane said these areas must also be protected.

"It is where our greatest opportunity is to protect them," she said.

Legal analysis from the Environmental Defenders Office (EDO) revealed the state laws allowed significant amounts of land clearing and development with little oversight due to exemptions and clearing codes.

Some codes might have safeguards but have limited application.

The report also criticises the state government's promise to double koala populations by 2025.

It found the NSW Koala Strategy was not legally binding, meaning it fails to effectively prevent habitat loss.

However, the analysis found that significant legal and policy reform could put an immediate stop to the population decline.

Strategies such as mapping koala habitat, applying legal protections to all koala habitats, mandating an appropriate level of oversight, bolstering safeguards and improving law enforcement would all help the population bounce back, EDO's special Counsel Cerin Loane said.

"It's clear that our laws are not up to the task of protecting koalas and their habitat," she said.

"We need urgent reform together with ongoing support for government agencies and private landholders to identify koala habitat, assess threats, and properly implement the rules."

Australian Associated Press