Australia's decision to allow dredging near the Great Barrier Reef breached the country's environment laws, a court has heard.

A green group has gone to court to try to reverse the federal environment minister's controversial decision to let a developer dredge within the Great Barrier Reef Marine Park.

Environment Minister Greg Hunt is also allowing the North Queensland Bulk Ports Corporation to dump dredge spoil in the park as it turns the Abbot Point port, near Bowen, into one of the world's biggest coal terminals.

Environmentalists fear the dredging and dumping of sludge will cause irreversible damage to the World Heritage-listed reef.

The declining natural wonder is already at risk of being added to the World Heritage Committee's list of sites in danger.

The Mackay Conservation Group has applied for a Federal Court review of the minister's decision and on Friday the grounds behind the challenge were outlined during an brief hearing in Brisbane.

Counsel for the conservation group Chris McGrath said the decision breached the Environmental Protection and Biodiversity Conservation Act, which requires the minister to comply with Australia's World Heritage obligations.

Mr McGrath said Mr Hunt's decision was also unreasonable, based on insufficient material, and an improper exercise of his power.

The case, which could effect future ministerial decisions, is expected to be heard later this year.