Ron Land, the CEO of Port Stephens Koalas, said he was "disappointed, but not surprised" by the Federal Environment Minister Sussan Ley approving on Tuesday the controversial expansion of the rock quarry.

The green light from Canberra comes after the NSW government had approved the project in July. The expansion will result in 52 hectares of koala habitat being cleared.

"Given the history of both governments in regard to the loss of koala habitat, I didn't expect any other outcome," Mr Land said.

He expected once clearing began, more injured koalas would be brought in from that area to the sanctuary's hospital, and that the decision exacerbated "an already poor situation".

"That general area is one where there are quite healthy koala populations, so it just beggars belief that anyone would interfere with that delicate balance," Mr Land said.

Construction materials company, Hanson, which operates the quarry, has said in a statement that, in addition to the state requirements for conserving vegetation, a 74-hectare koala habitat corridor would be established over the next decade.

"The 74-hectare corridor will provide better quality habitat than is currently there," a Hanson spokesperson said in a written statement.

The Mayor of Port Stephens, Ryan Palmer, said he was "a little bit surprised" by the federal decision.

"Any loss of koala habitat is devastating, but to have more [habitat] into the future makes me feel a little bit more comfortable," Cr Palmer said.

Opinion on this issue: 'They have rocks in their head'; Brandy Hill/Seaham Action group slams quarry call

The approval of the quarry expansion has prompted anger, with messages being posted online by celebrities, including singer Jimmy Barnes and comedian and bushfires relief fundraiser Celeste Barber. Save Port Stephens Koalas campaigners said their Facebook post about the decision had reached more than 120,000 people, and the issue was reported in the Italian media.

Despite the focus on the loss of koala habitat in Port Stephens, Cr Palmer did not believe that damaged the area's push to market itself as a place of natural beauty.

"Port Stephens is the home of koalas and will always be the home of koalas," Cr Palmer said.

However, the koala is facing a bleak future, according to a recent state parliamentary committee report into the animal's populations and habitats in NSW. The report warned that unless there was urgent government intervention to protect habitat, "the koala will become extinct in NSW before 2050".

Ron Land said the Brandy Hill decision and habitat loss made koala breeding programs, such as the one his organisation was setting up, all the more important.

"It's critically important," he said. "It's one of the main reasons we built the Port Stephens koala hospital in the first place. If we don't, and if other facilities don't, actively commence breeding programs, the extinction of the koala will be sooner rather than later."