Queensland's popular Fraser Island has been returned to its Indigenous people, with the Federal Court today granting native title rights.

The ruling recognised the World Heritage-listed island's Indigenous heritage of the Butchulla people and opened up possible economic opportunities for the future.

Federal Court Justice Berna Collier held an on-country sitting of the court today on 1,640 square kilometre island.

"The history of Australia, the European civilisation of Australia, is very closely linked with the Butchullas here on Fraser Island," Justice Collier said.

The Butchulla People have called Fraser Island home for at least 5,000 years, known to the local Indigenous people as K'Gari, which means paradise.

The world's largest sand island had not always been an idyllic home, with its people fighting off forced removal, sand mining and environmental damage, to maintain their connection to the island.

The CEO of Queensland South Native Title Services, Kevin Smith, said it was a significant claim that had been in the Federal Court for many years.

Mr Smith said the determination of native title was a testament to the strength of the Butchulla people and their ongoing connection to the land.

"K'Gari is internationally renowned for its striking natural beauty and unique environmental and Aboriginal cultural values," he said.

"This native title determination reinforces the Butchulla people protecting K'Gari as their island paradise for current and future generations.

"This is an opportunity to honour the courage and resilience of Butchulla elders past and present, to have their rights and interests to their traditional country recognised by the Australian legal system."

He said about 400 Butchulla people and various dignitaries were at today's hearing on the island.

The formal court recognition and related Indigenous Land Use Agreement strengthens the Butchulla people's ability to enjoy and protect their rights and interests over their traditional lands and waters.

Mr Smith said it also meant there could be economic opportunities for current and future generations of Butchulla people through eco-tourism and related business development.

"This momentous occasion closes the chapter on the long, frustrating struggle for legal recognition and opens another that involves the management and leverage of recognised legal rights," he said.

"[This is] a chapter that will be written by the Butchulla people themselves, a task that they will embrace with the same vigour, creativity and passion they have become legendary for."

Mr Smith said today's determination meant the State Government, national parks and the Butchulla tribe would be able to work together to help enhance the natural beauty of the island, which was largely covered by national parks.

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Watch Duration: 1 minute 28 seconds 1 m 28 s Federal Court grants native title over Fraser Island ( Kallee Buchanan )

"There [were] a number of things that [would] be recognised - obviously the right to come onto country, hunt, fish and take water for domestic purposes, but very importantly to practise culture on Fraser Island," he said.

"After the determination, there will be discussions with the State Government as to how the Butchulla people will utilise their native title."

Butchulla elder Susan Graham said the traditional owners had been trying to gain native title for decades.

"It's really important that it's publicly recognised, that the Government is recognising it and the community understand, and for our people it is just important to understand that this is the country we belong [to]," she said.