A mining company has announced it intends to launch a legal challenge over a federal government decision that has halted its gold mine in the New South Wales Central West. 

Regis Resources said in a statement it had lodged papers in the Federal Court seeking a judicial review and relief, relating to a decision by Environment Minister Tanya Plibersek over its McPhillamys Gold Project near Blayney.

In August, Ms Plibersek granted an Aboriginal protection order over the site of the mine's tailings dam, which would have been built at the headwaters of the Belubula River.

The Wiradjuri Traditional Owners Central West Aboriginal Corporation and another individual lodged a Section 10 application under the Aboriginal and Torres Strait Islander Heritage Protection Act, requesting the area be protected.

Regis says mine now unviable

At the time of her announcement, Ms Plibersek said her decision did not mean the mine could not proceed, and the tailings dam could be built at another location on the mine site.

The company has repeatedly disputed this.

It said the declaration had rendered the project unviable and revised plans would take up to a decade to complete.

Regis Resource said if its application was successful, it would be asking the Federal Court to declare the minister's declaration "legally invalid", that it be redetermined by a different minister, and for the company to be awarded costs.

"Our hope is that the Federal Court will find that the Section 10 declaration is legally invalid and that an alternative decision maker will properly evaluate the claims before them before making a decision."

In a statement, a spokesperson for Ms Plibersek said "as legal proceedings have commenced, it would be inappropriate for the minister to comment".

A date for the first hearing in the Federal Court is yet to be set.