More than 69 hectares of Riverina Crown land will be returned to the local Aboriginal community near Tumut.
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The two blocks of land are being returned after the NSW government granted claims to Brungle-Tumut Local Aboriginal Land Council.
Brungle-Tumut Local Aboriginal Land Council CEO Sue Bulger said the land could be used for a range of purposes.
"To have such large blocks close to town and accessible by roads is tremendous news," Ms Bulger said.
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"There's a need for more affordable housing for the Aboriginal and wider community so part of the town block could be considered for residential development.
"We would consider using part of the block near Mundongo for a seed orchard to grow endangered plants like the Tumut grevillea."
Under the Aboriginal Land Rights Act, land can be found to be claimable and returned to local Aboriginal land councils as freehold land.
Crown Lands said it is working to process more land claims, prioritise the most important claims for land councils and negotiate Aboriginal land agreements to settle claims.
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