The Berejiklian government's controversial plan to raise the height of the Warragamba dam is likely to have "significant impacts" on threatened species in the Blue Mountains, the federal environment department has found.

The assessment – contained in a document released under freedom of information laws – of the plan to lift the wall 14 metres was made under the federal Environment Protection and Biodiversity Conservation act.

Warragamba Dam, which is about 60 per cent full, is being considered for a wall-raising that would flood part of the Blue Mountains World Heritage area. Credit:Brendan Esposito

The review noted the project aims to protect downstream communities in the flood-prone Hawkesbury-Nepean region of north and western Sydney. The wall raising would result in at least temporary inundation of parts of the Greater Blue Mountains World Heritage Area.

"The impact of increased flood water levels within the dam is likely to have extensive and significant

impacts on listed threatened species and communities and world and national heritage values of the [area]," the department said.