A conservation group warns they have just three weeks to raise $US3 million to save the iconic Hollywood sign from being razed by investors who want to build luxury houses on the site.

"We feel good about where we are and we feel good about our chances to do this," said Tim Ahern of the Trust for Public Land.

The group needs to raise $US3 million to reach the $US12.5 million needed to purchase the 138-acre parcel of rugged land surrounding the sign from a Chicago-based consortium that has acquired rights to build four luxury mansions along the ridgeline.

The investors sought to sell the property for $US22 million but agreed to the $US12.5-million price tag for the conservation group only if payment arrives by April 14.

Los Angeles council member Tom LaBonge says the trust has so far collected $US9.5 million - $US4 million from public funds, and the remainder $US5.5 million from private donors, including movie and television companies and Hollywood stars such as director Steven Spielberg and actor Tom Hanks.

"We're getting closer to our goal and if we continue working hard, I know we'll reach it," Mr LaBonge said.

One of the world's most recognisable landmarks, the sign was given a facelift last month when the trust shrouded each of the 13-metre high letters in blankets so the slogan "SAVE THE PEAK" became visible for miles around the sprawling Californian city.

The Hollywood sign itself, which was initially created as an advert for a real estate development called Hollywoodland in 1923, is owned by the city of Los Angeles.

One of the City of Angels' most beloved attractions, the sign had fallen into disrepair until it was restored in the 1970s after a campaign which saw nine donors pay $US27,777 to "adopt" one letter each.

- AFP