Locals say they are "surprised and relieved" the proponent of a wind farm between Canberra and Goulburn has withdrawn its application.

Renewable energy company EPYC said its proposed 54-turbine Jupiter Wind Farm five kilometres south-east of Tarago will not be going ahead.

The long-running controversial project has been widely opposed by local residents and the Queanbeyan-Palerang and Goulburn Mulwaree councils.

More than 400 people submitted objections to the NSW Department of Planning and Environment (DPE).

Earlier this month, the department recommended the project be refused.

The final decision was resting with the NSW Independent Planning Commission (IPC), but late last week EPYC advised it had decided to withdraw its application.

In a letter to the IPC, the company's business development manager Shahroo Mohajerani said it was a decision that was not "taken lightly".

"In reviewing the assessment report from DPE we believe that the assessment report did not take into full consideration the extent of all the improvements made to the proposed project," he said.

"As such EPYC PTY LTD believes that the IPC's finding would not be contrary to recommendation made by DPE."

Mr Mohajerani said it was a lost opportunity for the local area.

"Sadly the prospect for new wind farm development in NSW appears to be extremely limited as the opportunity for proponents to enter the market is hindered by the ongoing changes in requirements," he said.

Campaigners say a lot of damage has been done

The IPE said a planned site visit and public meeting this week had now been cancelled.

"The commission rejects the assertion its assessment and determination of the application would not have been made fairly and independently of the department," it said.

Residents Against Jupiter Wind Turbines spokesman Michael Crawford said it was a good result, but a lot of "harm" had been done along the way.

"We were surprised because the community has been telling [EPYC] for four years or more that this is an inappropriate area and they had refused to listen to that," he said.

"The community is happy about the outcome but at the same time many members of the community are angry about the fact for more than four years the community has been under stress.

"People's lives in many cases have been put on hold with uncertainty of what the implications would be.

"For a lot of people it's a real win to have this occur and they can now start to get on with their lives without the uncertainty this is going to go on for years and years."

Mr Crawford said the three wind-monitoring masts installed in the area by EPYC need to be removed immediately.