A major dairy farm has removed a dam and returned hundreds of megalitres of water to the environment.

As part of a legal requirement following alleged unauthorised water take, The Oran Park dairy farm, operated by Leppington Pastoral Co Pty Ltd, has removed one of three large dams constructed in the 1980s that could hold about 1,680 megalitres of water.

It comes after the Natural Resources Regulator (NRAR) issued an enforceable undertaking late last year, which included a $425,00 payment and orders to remove the dam and return the water to a south-western Sydney catchment.

More than 900 megalitres has been returned to the South Creek catchment.

The dam was used to feed irrigation to grow dairy fodder, but NRAR alleged the company did not hold a water access licence for the water take or a water management works approval for the dams and pumps.

The findings led to the largest enforceable undertaking (EU) NRAR has ever issued.

It included a $300,000 payment for alleged unlicensed water take, $100,000 for the water regulator's legal and investigation costs, removal of dams, rehabilitation work along Julia Creek and a $25,000 donation to Landcare for remediation work on South Creek.

NRAR's director of water regulation, Gregory Abood, says 900 megalitres is a significant amount of water to return to the environment. 

“Reclaiming more than 360 Olympic swimming pools worth of water is a significant win,” he said.

“That water is now accessible to not only the environment but to other water users and also to the cultural value of water along South Creek.”