The Department of Defence has ruled out paying compensation for the contamination of Indigenous-owned land at Wreck Bay on the south coast of NSW.

Key points: PFAS chemicals from Jervis Bay Range Facility has leached into nearby Mary Creek

PFAS chemicals from Jervis Bay Range Facility has leached into nearby Mary Creek The site is used by traditional custodians of the land who fear long-term contamination

The site is used by traditional custodians of the land who fear long-term contamination The Defence Department said they are not considering compensation for land owners there

For the past two years, the 200-strong community has been unable to drink the water or eat the fish from the nearby Mary Creek.

The creek has been closed to human use due to contamination from PFAS chemicals used in firefighting foam that have leached out from the Jervis Bay Range Facility, a navy airfield two kilometres to the north.

Indigenous elder Michael Williams, who identifies as Koori, said his people are facing the long-term loss of the use of their traditional land.

He's worried that their culture and connection to the land may be permanently severed.

"It might be like a nuclear waste, it might be here forever, we don't know," he said.

"This is our home, we didn't damage our waters, our own government did.

"We've got to be compensated for what they've done to our culture."

Associate Professor Dennis O'Carroll from the Water Research Centre at the University of New South Wales, is researching how PFAS behaves in the environment.

"PFAS is very, very mobile and it's very persistent, so it doesn't degrade," he said.

"It could be there for decades or hundreds of years.

"We have many contaminated sites on military bases where they stopped using PFAS a decade ago and the contamination is still there."

Earlier this month, a parliamentary inquiry recommended that compensation be paid to people living on land contaminated by PFAS from defence sites.

But in the case of Wreck Bay, that has been ruled out.

A warning sign at Captain's Lagoon, near Jervis Bay, about PFAS contamination. ( ABC News: Jessica Clifford )

"Based on the knowledge and evidence available at this time, compensation is not currently being considered as a result of the contamination at Jervis Bay," a Defence Department spokesperson told the ABC.

Mr Williams called on the Defence Minister to go to Wreck Bay and talk to the people face to face.

"We've always been close with the navy, we've always been together you know, very close ties with them," said Mr Williams.

"They're going to have sort something out because this side of the territory, the Aboriginal side, has been buggered up at the moment because of the chemicals."