The Berejiklian government has given the nod for the extension of coal mining under one of Greater Sydney's reservoirs, the first such approval in two decades.

The Planning Department earlier this month told Peabody Energy it could proceed with the extraction of coal from three new longwalls, two of which will go beneath Woronora reservoir.

Peter Turner, from the National Parks Association of NSW, points at a crack in the rocks in the Eastern Tributary, in the Woronora catchment area, south of Sydney. New mining has been approved that will go under the reservoir. Credit:Janie Barrett

Planning Department official Mike Young says in a letter dated March 16 to Metropolitan mine that as the longwall will be the first to go under the reservoir it was important the extraction plan was "sufficiently robust" with "an appropriate adaptive management regime" to limit the impact of subsidence on water supply.

The letter details conditions for the miner, which include regular reviews of monitoring data and monthly reports to Planning and WaterNSW.