The research, released by the Nature Conservation Council, WWF Australia and other conservation groups on Wednesday, found 17 of the state's top 20 deforestation hot spots contain substantial areas of koala habitat.

It also claims eastern Australia is one of the world's top 11 deforestation hot spots - alongside the Amazon and the Congo, promptings calls for stronger land clearing laws.

Excessive land clearing is worst in NSW's central west and north west, with pockets on the north coast, Hunter Valley and south west, the report said.

"Without a dramatic change, koalas and other species that rely on forests and woodlands for their survival will continue their catastrophic decline," NCC chief executive Kate Smolski said in a statement on Wednesday.

The Wilderness Society national director Lyndon Schneider said a third of the koala population has been wiped out in NSW in just 20 years.

"The koala is facing an extinction epidemic in NSW, with some estimates saying this iconic animal could be extinct in the state by 2050," he said.

The protection of koala habitat has become a talking point ahead of the state election in March.

Labor has promised, if elected, to protect the last disease-free koala colony in NSW in a dedicated national park on Sydney's south-west fringe.

It's also backed a National Parks Association of NSW campaign to turn 175,000 hectares of state forest near Coffs Harbour into the Great Koala National Park.

Meanwhile, the Berejiklian government has committed to building a koala sanctuary in Pottsville, near Tweed Heads, as part of a $45 million plan to stabilise priority populations and increase koala numbers across the state.

Australian Associated Press