The F3 extension road is at the heart of the case for the $1.5 billion new town, a "state significant site" study made public yesterday and documents tabled to state parliament show.

The study supports the rezoning of the site near Branxton for the new town that would be home to up to 20,000 people if the development is approved.

A previous proposal for the project had its government approval cancelled last year.

That came in the wake of a Land and Environment Court decision that ruled memorandums of understanding with the government about offset conservation lands could constitute a "land bribe".

Under the cancelled approval, Huntlee's proponents were required to subsidise bus services, in an effort to alleviate the pressure the development's traffic would add to the congested New England Highway.

But documents tabled to the NSW Parliament show the government was preparing to scrap the condition last year, in response to the federal government's decision to build the Hunter Expressway.

A draft department briefing note said the subsidy and another requirement for a Huntlee public transport use target to be achieved, should be dropped.

"The improved road access provided by the [expressway] also reduces the incentive to achieve a higher share of public transport [use]," the note said.

The study includes the same public transport targets as those in the initial proposal, and says urban design will encourage bus use and cycling.

It also says the proximity to the planned expressway means the new town's traffic can be accommodated.