A community in north-western New South Wales is preparing to unveil a street named after an icon of Australian folklore.

The 'drop bear' is said to be a reclusive animal that shies away from roads and humans — but it is a different story at Upper Moore Creek near Tamworth where a road will be named after the mythical creature.

The idea has now been given the final tick of approval and is believed to be a national first, much to the thrill of local resident Kylie Evans who was the instigator of the name.

She said the drop bear had been the subject of many jokes among her family who regularly walked along the previously unnamed lane.

"It's a rugged old lane and there are overhanging gum trees at several points along it," Ms Evans said.

"We had started thinking about putting up 'beware of the drop bears' signs just for fun.

"Then as we were building a new house, we thought we'd need an actual address that wasn't ordinary but a bit more interesting."

Bringing some fun to signage

Tamworth Mayor Col Murray said reaction to the proposal had been positive and overwhelming.

"It's just something that's attracted a lot of interest from people," he said.

An artist's impression of the mythical drop bear. ( Wikimedia Commons: Yamavu (own work) )

"One of the consistent comments was that we tend to get very staid and very serious and ultraconservative about our road names and street names and things.

"This was thought to be a great thing to introduce a bit of light-heartedness."

The possibility of the sign becoming a target for thieves has been raised but Councillor Murray is not yet certain whether special measures would be put in place to prevent theft.

"I'm sure the staff would be thinking of that," he said.

"There has even been discussion about having some replica signs made up for people to use, and even one of our tourism operators said it's something he may be able to sell to the tourists so I guess that's something we'll have to work through."

Other mythical animals not ruled out

Councillor Murray has not ruled out naming other streets after mythical bush creatures like yowies and panthers, but said it was up to the community to make an application.

"The street name and the themes are not normally generated by council, it's normally generated by the community," he said.

"In the case of a new subdivision, it's normally the development community that will come up with a concept for names and in this case, the application was made by a resident, [not] by the council.

"So there is a process there and I guess if this could be seen as a precedent there are probably opportunities for other names."

A sign for Drop Bear Lane is expected to be installed within days and there are plans for a community event to mark the unveiling.

"I really love the idea of that Australian larrikin character coming out through the myth of the drop bear," Ms Evans said.

"And now to be able to live on a street named after the drop bear!

"It'll also be a lot easier to get pizza delivered."