Underwater seaweed forests that disappeared off a 70-kilometre stretch of Sydney's coastline in the 1980s have made a remarkable recovery through a project that has reached the final of the Eureka Prize for environmental research.

Scientists believe the same transplant technology could help other coastlines that are in peril across Australia.

Dr Ezequiel 'Ziggy' Marzinelli, a senior research fellow at the University of New South Wales (UNSW) said vast forests of crayweed vanished from urban areas of Sydney in the 1980s.

He said scientists believe pollution, including sewage that was pumped into the ocean off areas including Bondi Beach, was to blame.

"Although water quality improved significantly in the early 90s, this crayweed did not come back on its own. So we lost all this forest, along with all the animals that live on the forest," he said.

A stormwater pipe off Bondi where poor water quality killed crayweed in the 1980s. ( ABC News: Nicole Chettle )

When the forests disappeared, biodiversity off some of Sydney's most popular beaches was devastated.

Crayweed supports lobster and abalone, two of Australia's most valuable seafoods.

But Dr Marzinelli said the project's success was a refreshing change when it came to tackling environmental degradation.

"This is a very good news story in that we can actually do something about it, fix it. And it seems to work," he said.

Seaweed regrowth 'really something'

Light green crayweed is now growing naturally amongst other seaweed. ( ABC News: Nicole Chettle )

Scientists launched Operation Crayweed, to replant the species in affected areas, from Palm Beach to Botany Bay.

The crayweed is transplanted onto specially designed mats to support the species on rocky reefs and as it reproduces, it spreads along the reef and the sub-tidal zone, which is mostly submerged, but exposed at low tide.

Dr Adriana Verges, a Marine Ecologist at UNSW said the results at the first site off Malabar Beach at Long Bay, planted in 2011, were remarkable.

John Turnbull helped plant the crayweed that is now thriving off Malabar Beach in Sydney. ( ABC News: Nicole Chettle )

"About six months later we started seeing what we call craybies, which are crayweed babies. Now we're onto the third or maybe the fourth generation of crayweed individuals in this area," he said.

"We planted maybe 20 square metres. From there, they're expanding hundreds of metres away."

The ABC visited the site, where crayweed was visible above the incoming tide, repopulating its natural habitat well beyond the test site. Scientists said that was evidence the underwater forests were returning.

John Turnbull, a marine photographer and member of the Underwater Research Group that helped plant crayweed, said it was exciting to see the progress.

"It's growing up the walls of the rock. It's growing along the ledges. And all the little baby crayweed plants are starting to grab hold of that rock and take over. It's really something to see the forest coming back," he said.

'Volunteer' citizen scientists play key role

Crayweed planted on restoration mats in Bondi. ( Supplied: John Turnbull, Marine Explorer )

Volunteers played a crucial role in helping replant the crayweed on a much larger scale than researchers could manage alone.

"If we want to restore habitats that have been degraded at the right scale, and in most cases that means kilometres of coastline, we need to rely on the general public to give us a hand," Dr Marzinelli said.

"That's where I think citizen science is very important. Because there's a lot of people who are interested in the environment. It's their backyard basically. So getting them involved is logical."

Mr Turnbull agrees.

"Citizen scientists can stand side by side with the scientists and really make a difference," he said.

Baby crayweed plants (craybies) taking hold at Long Bay. ( Supplied: John Turnbull, Marine Explorer )

Director of the Sydney Institute of Marine Science, Professor Peter Steinberg, said the techniques his team had refined over six years could be adjusted and applied to other areas.

Map Locations for coastline crayweed project

"There is crayweed or things like crayweed [such as] kelp, across 7,000 kilometres of Australia's coastline. And that coastline is threatened. Those forests are also threatened," he said.

"We see there is a bigger challenge coming down the track for these other species of seaweeds."

So far crayweed has been replanted at Long Bay and Little Bay, and there are two new sites at Bondi and Kurnell.

The Eureka Prize winners will be announced at the Australian Museum in Sydney on August 30.