Residents of New South Wales Blue Mountains have declared their area a nuclear-free zone, a federal government report released on Wednesday said.

With the declaration, the report recommended using South Australia as the route to transport nuclear waste from the Lucas Heights reactor in Sydney to a proposed dump in the Northern Territory. The planned dump is at Muckaty Station, north of Tennant Creek.

The decision has angered South Australia officials.

"We are located within the Murray-Darling Basin, which is the food bowl of Australia.... It seems that it's all right to take it (the waste) across the Murray River but don't take it through the Blue Mountains," Berri Barmera Council Chief Executive David Beaton told the Herald Sun.

"You would think it would be better to take the shortest routes," he added.

The plan would be to transport up to 8,000 tonnes of low-level and short-lived intermediate waster level through rail or road using B-double semi-trailers moving the shipping containers. Another 67 tonnes of intermediate-level waste of reprocessed spent fuel rods shipped to Adelaide from Scotland and France would be sent to the new dump.

The specific route for the nuclear waste on its way to the dump is through Sturt Highway along the River Murray and the Dukes and Stuart highways in South Australia. The waste would be packed into 200-litre steel drums and transported in 6m shipping containers. Up to 16,000 drums are expected to be trucked across Australia and another 9,700 drums from Woomera to the Northern Territory.

A bill to introduce the dump at Muckaty Station, which the traditional owners nominated to the government, is before the Senate and would likely be approved before the end of 2011.