It's been 200 years since an official colony formed on the NZ mainland. But if the colony at Port Pegasus sees 35 pups born next year, its status would be official.

Sea lions are on the verge of establishing the first breeding colony on mainland New Zealand in 200 years.

The critically endangered marine mammals have taken a fancy to a remote area of Stewart Island, Port Pegasus, an area that has previously been earmarked for aquatic farming.

For Port Pegasus be considered a breeding colony the sea lion population needs to produce more than 35 pups each year on site, for a period of five years.

KELLY BUCKLE/MPI A juvenile sea lion in Port Pegasus in January 2016.

Department of Conservation science advisor Laura Boren said the sea lions had met that mark every year for the past four years.

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That meant if there were more than 35 pups when the rangers returned in March 2018 it would be considered a breeding colony, she said.

The implications of it would be huge as it would be the first on mainland New Zealand in 200 years, Boren said.

Rangers started monitoring the population in 2011 after receiving several reports of sea lion activity from hunters and fishermen who had been in the area.

The rangers started tagging whatever pups they could find to track whether they were returning to Port Pegasus, Boren said.

Each season was a learning process as they figured out where to search for the sea lions, Boren said.

While the area is remote, there is the possibility for greater contact with humans in coming years, as the North Arm of Port Pegasus is currently being explored as a possible site for a new aquaculture venture for the Southland Regional Development Strategy.

Southland Regional Development Strategy new industries team leader Mark O'Connor said the SoRDs team was still in the process of investigating the feasibility of the aquaculture project.

"At this point in time we don't have answers, we're still in the information gathering stage."

The team was working closely with DOC, Ngai Tahu, Ministry for Primary Industries and the Ministry of Business, Innovation and Employment, which were providing input.

The vast majority of sea lions breed on the Auckland Islands and Campbell Island.

Little was known about the population on Stewart Island with most information coming from studies looking at the populations in the Sub Antarctic islands.

Rangers did not know if diseases were present among the population on Stewart Island, Boren said.

Earlier this month Primary Industries Minister Nathan Guy and Conservation Minister Maggie Barry announced $2.8 million of funding during the next four years to ensure a comprehensive New Zealand Sea Lion Threat Management Plan at the Threatened Species Summit in Wellington.

The additional funding announced by the ministers would allow researchers to expand on the monitoring effort made in the past, Boren said.

Southern South Island operations director Harry Maher said it had been asked to provide science and technical advice as it has the knowledge and information on the important values at Pegasus.

"The effect of salmon farms on sea lions and sea lion breeding is something that will be carefully looked at as part of the aquaculture investigations."

DOC wanted to ensure that aquaculture development takes place in appropriate places and within environmental limits, Maher said.

Department of Conservation Stewart Island ranger Kevin Carter said It looked as though the sea lion population was expanding back onto the mainland.

"It's an indication the sea lions are colonising northward from their strongholds in the sub-antarctic islands."

Smaller breeding grounds, with the number of pups in the teens, were also growing in coastal Southland and Otago, Carter said.

The news comes on the back of a rebound in the population in the Auckland Islands, where 90 per cent of New Zealand's sea lions are located.

In 1965 sea lion pups were recorded as being born in 2017, up from 1727 in 2016 – a 14 per cent increase.

There are just under 12,000 sea lions in New Zealand, and in recent years they have been suffering from a decline to the breeding population on the Auckland Islands.

Carter said with the rise in coastal populations, the main focus for DOC was to ensure the sea lions had adequate space from human interference.

"Obviously as they spread north they'll come into contact with humans more and more.

"It's about having a respectable distance from them – we've got to respect their space."