Defence Housing Australia has halted preparatory work to build 800 new homes across 131 hectares at Lee Point until March next year due to lingering environmental and Aboriginal cultural land issues with the project.

“DHA has made the decision to voluntarily stop work at Lee Point until March 31 2024. We will be using this time to work with relevant government agencies and respond to the application regarding Aboriginal cultural heritage at the site,” DHA said in a statement.

The project, approved in 2015, will see DHA build a suburban residential development on the Defence land.

Last month, DHA’s land clearing operations were suspended after 11 protesters were arrested which led to Environment Minister Tanya Plibersek issuing an emergency injunction order.

DHA finally suspended the project after Larrakia’s traditional owners, who had earlier approved the development, withdrew support and aired their opposition to the project, citing that significant areas of cultural heritage were located within the site.

Larrakia Nation Chair Jerome Cubillo said he welcomed DHA’s decision but pointed out that the situation demonstrates the need for stronger Larrakia land rights.

“They (DHA) are trying to work with us and trying to find a solution. We’re not averse to development … but this site is just not the right site,” Mr Cubillo told the ABC.

“We thought … significant consultation had taken place, we thought the right checks and balances had been put in place. We had to listen to the voices of our elders … because we need to ensure … that knowledge isn’t lost.”

He said Larrakia Nation will be proposing substitute sites for the project and is interested in buying back the land from the DHA to use for the benefit of traditional owners.

“We’re seeking opportunities to see where we might be able to access funds, whether that’s [through] the Northern Territory’s Aboriginal Investment Corporation,” he said.

Ms Plibersek had approved the housing development on June 16, after environmentalists and bird watchers warned that the project would negatively affect the breeding grounds of Australia’s endangered Gouldian finch.

She said she gave the project the go-ahead after DHA had agreed to redesign its plan to include a 50m buffer zone around a waterhole where the Gouldian finch had been spotted.

Environmentalists, however, said that requirements for the implementation of a program to monitor the negative impacts of the project on migratory birds in the area have not been met by DHA, which is a necessity before any work on the project starts.