The Environmental Protection Authority told a government review that it wanted to avoid "unnecessarily blighting" land values and could be trusted to manage the contamination without its usual public disclosure.

Macquarie University professor Mark Taylor, who led the review, found the authority had decided "not to routinely declare all sites where the contamination is significant enough to warrant regulation".

"I remain uncomfortable about this inconsistency," Professor Taylor told Fairfax Media.

Real estate agents and a key environmentalist behind the creation of the state's land contamination laws said they were alarmed that residents throughout the state could be living unknowingly on top of dangerous chemicals.

On Friday, authority chairman and chief executive Barry Buffier said property values were not the "driving factor" in decisions to declare sites significantly contaminated and the authority's chief concern was the protection of human health and the environment.

Mr Buffier said the onus to inform residents about the contamination fell on local councils and the polluters themselves.

The authority's usual practice is to declare land "significantly contaminated" when the site poses an elevated risk to human health or the environment. The process requires that the site be gazetted and listed on its website with a description of contaminants and their possible harm.

It also enables the agency to pursue polluters and force them to remediate the site.

During his investigation, the authority told Professor Taylor that "declaring land, particularly residential land, can affect the valuation of a property".

"This can be an unfair penalty for innocent owners where the contamination of their land is being effectively managed," it said.

The position is set out in internal guidelines, which state: "Generally the EPA does not declare off-site residential land to avoid unnecessarily blighting that land and causing undue concern."

But in two cases since 2015, EPA officers, contrary to their internal guidelines, failed to provide written justifications for their decisions to not declare land contaminated.

Real Estate Institute of New South Wales president John Cunningham said the authority's policy may lead real estate agents to sell contaminated land without making it known to buyers.

"If we had a contaminated property we wouldn't touch it with a 10-foot pole, because it might come back and bite you," he said.

"I find it very strange, I can't comprehend that position from government ...The onus should be on the government to disclose and I can't see how the EPA could hold back that information."

Total Environment Centre executive director Jeff Angel, who helped champion the state's land contaminated laws, said the authority's position ran counter to its own legislative objectives.

"The EPA seems to have made this up and undermined what Parliament intended, including transparency about what land is contaminated and reasons for decisions," he said.

"Contamination is a serious environmental and health issue for existing and future owners and the wider community. It should not be hidden or future management will be compromised by the body responsible for protecting our environment."

Mr Buffier said it was the authority's practice to manage contamination at its source.

"If there happened to be an adjoining property that was so badly impacted that it was a risk to human health, then it would be declared," he said.

"We don't, strictly speaking, look at land values per se."

Prospective property buyers could find out about contamination from council land certificates , and existing owners should already be notified by the polluters themselves, Mr Buffier said.

Environment Minister Gabrielle Upton declined to be interviewed or answer specific questions but said she would consider the recommendations in the Taylor report, which was completed in December and released this month.

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