A colony of penguins on a remote island near Sydney are moving into new, specially designed digs to ensure their survival, after a bushfire wiped out their habitat last year.

Key points: Around 85 per cent of the penguins' habitat on Lion Island was destroyed by fire last year

Around 85 per cent of the penguins' habitat on Lion Island was destroyed by fire last year Their new burrows are fireproof and have been installed just in time for mating season

Their new burrows are fireproof and have been installed just in time for mating season They were made by a women's shed group known as the Fix-It-Sisters

Lion Island, an 8 hectare outpost at the mouth of the Hawkesbury River, had been home to one of the Harbour City's two remaining colonies of Little Penguins.

The island is hard to access and largely predator-free, but a bushfire sparked by a lightning strike tore through about 85 per cent of the penguins' habitat last year.

NSW National Parks and Wildlife Service rangers have installed 20 concrete burrows on the island, which are fire-proof and can also protect the creatures from foxes and goannas.

"At the moment the birds are coming onto the island for what we call 'prospecting'," ranger Rachel Labador said.

"They're looking for a place to mate and lay their eggs.

"We're hoping in a month or two we'll come to the island and these burrows will be occupied by birds on eggs."

The bushfire destroyed much of the Little Penguins' habbitat. ( Supplied: @ausfirefighter )

Little Penguins only exist on mainland NSW in one location — Manly Beach — but that colony is under threat from predators and human activity.

So if the burrows on Lion Island are successful, there are plans to install them at other mainland locations.

"There's evidence all up and down the coast that penguins were on the mainland," Ms Labador said.

"But with development and feral predators, they were pushed off and only survive on these offshore islands."

The bunkers are filled with leaf litter and penguin poo to let the birds know it is safe. ( ABC News: Jessica Kidd )

NSW Environment Minister Matt Kean said the burrow program was part of a push to protect the Little Penguins' future.

"We're installing these nests to protect penguins, enable them to nest and hopefully grow the population," he said.

The burrows were designed by wildlife rangers and manufactured by a women's shed group known as the Fix-It Sisters.

Co-founder Linda Prince said her group was delighted to take part in such a worthwhile project.

"It was hard work but we really loved doing it," she said.

"It took hours and hours but there was lots of laughs, lots of sore backs and sore hands."

Access to Lion Island is restricted to those undertaking conservation or research. ( ABC News: Jessica Kidd )

Each burrow has been set up in a location where the rangers know the penguins have been prospecting and where they are likely to nest.

Ms Labador said she lines the new burrows with leaf litter and penguin poo so that any prospecting bird knows it is a safe place to nest.

"This is the primo penguin real estate," she said.

"Penguins like coming back to the same place, so if we can have a burrow that will last for decades we know that the penguins will keep using it."