The WA Government has lifted its moratorium on hydraulic fracturing, or fracking, but has promised 98 per cent of the state will remain "frack free".

Key points: A report says if fracking is done safely, the risk to people and the environment is low

A report says if fracking is done safely, the risk to people and the environment is low The ban will be lifted on existing petroleum titles, an area the Government says covers 2 per cent of WA

The ban will be lifted on existing petroleum titles, an area the Government says covers 2 per cent of WA The move has divided conservationists, the mining industry and traditional owners

Premier Mark McGowan said a ban on fracking in the Perth, Peel and South West regions would be maintained.

Farmers, landowners and native title holders would also be allowed to refused fracking — a practice where drilling is used to fracture the ground and release trapped gas.

The decision comes after the release of a 12-month inquiry, led by Environmental Protection Authority (EPA) chairman Tom Hatton and commissioned by the McGowan Government.

The report found if the process was carried out safely, the risk of fracking to people and the environment was low.

"However, the report identified the opportunity to further reduce risks with a set of recommendations for additional prescriptive regulation," the inquiry concluded.

A total of 44 recommendations were made to tighten regulations, including:

No fracking to be allowed within 2 kilometres of public drinking water sources;

No fracking to be allowed within 2 kilometres of public drinking water sources; All projects to include EPA assessment;

All projects to include EPA assessment; An enforceable code of practice; and

An enforceable code of practice; and No fracking to be allowed within 2 kilometres of towns and dwellings

"What we presented are the risks and how they might be minimised," Dr Hatton said.

"The principal recommendation is for an enforceable code of practice, incorporating a number of very specific and technical and prescriptive recommendations aimed at further reducing the risk.".

EPA chairman Tom Hatton says a fracking code of practice is of paramount importance. ( ABC News: Eliza Laschon )

Mr McGowan said the Government would be adopting all of the recommendations, and would go even further to protect WA land and communities.

"We need to respect what the science tells us," Mr McGowan said.

"And we also need to listen to the views of all Western Australians and take into account what they expect from their Government."

Approach strikes a balance: McGowan

Mr McGowan defended the decision to maintain bans on fracking in the most populated regions of Perth, the Peel and the South West.

He said his Government's fracking moratorium, which has been in place since last year, would only be lifted on existing petroleum titles, an area he said covered "just 2 per cent of the state".

WA Premier Mark McGowan says a ban on fracking in southern WA will continue. ( ABC News: Eliza Laschon )

"Some will argue we've gone too far. Others will argue we haven't gone far enough," he said

"But the majority of Western Australians who support economic opportunity and environmental protection can be confident we have struck the right balance.

"To impose a blanket ban of fracking, when the evidence shows the risks can be managed, would undermine the state's reputation as a safe place to invest and do business.

"We cannot turn our backs on the potential jobs, investment and new energy supply the onshore gas industry can supply."

National parks, Dampier Peninsula in the Kimberley and public water source areas have also been declared "off limits" to fracking.

"[The Government will] change the rules so that farmers, land owners and traditional owners will, for the first time, have the right to say yes or no to gas production from fracking on their land," Mr McGowan said.

"This is a fair and reasonable approach."

Exploration area 'the size of Tasmania'

The current exploration permits are in the Kimberley, adjacent of the Dampier Peninsula area, an area north-east of Carnarvon and an area between Geraldton and Gingin.

Fracking is already allowed in other states, while a moratorium in NT was also lifted this year. ( ABC News: Dan Fitzgerald )

Paddy Cullen from the Conservation Council of WA said the area of land where the current leases exist was "vast".

"Two per cent can sound like a small number but it is a foot in the door, it's still a vast area. It's 5.1 million hectares, nearly the size of Tasmania."

"We don't see why those communities have to suffer."

The resources industry said it was disappointed with the Government's decision to keep the ban across most of the state.

WA Chamber of Minerals and Energy chief executive Paul Everingham said the removal of the moratorium was a good thing, but the Government should have gone further to allow fracking in more parts of the state.

"The report proves once and for all the science that there is little or no environmental damage from hydraulic fracturing," he said.

Traditional owners split over benefits

The decision has also drawn a mixed response from traditional owners in WA's Kimberley, which hosts a number of existing gas exploration leases.

Protesters gathered at Broome's Entrance Point beach ahead of the fracking announcement. ( ABC Kimberley: Rhiannon Shine )

Thomas Skinner from the Yungngora Aboriginal Corporation, at Noonkanbah in the central Kimberley, welcomed the announcement and said it opened up employment opportunities for local people.

"We know what is best for our people and our country, not people from other places who don't know us or pretend to speak for us," he said.

"I hope these people will now respect this decision.

"We want our young people getting training and local jobs, not lose them to drugs and alcohol."

But Nyikina traditional owner Anne Poelina accused the Government of taking a "divide and conquer" approach.

She was concerned Indigenous veto rights could put nearby landowners at odds.

Anne Poelina says the Government has used a "divide and conquer" approach on fracking. ( ABC Kimberley: Rhiannon Shine )

"One rule must apply for all citizens," she said.

"I'm concerned that if decisions are being made by traditional owners, particularly with regards to the Fitzroy River and the Fitzroy Catchment, that will definitely impact on us downstream.

"I think we are being a little bit defrauded."

Karajarri Traditional Lands Association chairman Thomas King said Indigenous veto rights would give traditional owners "more bargaining power" when negotiating with companies.

"It is a positive outcome for Indigenous people across the state," he said.

"We're yet to go through a formal negotiation process for approving fracking, but if that happens we will be looking for benefits of some kind — jobs and some long-term, meaningful investment from the companies for the benefit of our community."