The University of Sydney has become the first institution of its type in Australia to halt further investments in coalmining, a move likely to send ripples through the funds industry.

On Monday, the university said it had halted investments in Whitehaven Coal, the miner developing the controversial Maules Creek open-cut coalmine, which is the largest such project in the country.

Considering its options: Sydney Uni may divest itself of its $900,000 holding in Whitehaven. Credit:Phil Carrick

As part of a review being undertaken by the Mercer Group, however, Sydney University told Fairfax Media the bar on investments extended beyond Whitehaven.

"The university has issued an instruction to its Australian equities managers to make no further investments in the coal and consumable fuels subsector of the ASX," a spokeswoman for the university said.