Wagga City Council is investigating - in collaboration with NSW Police, the NSW Food Authority, Local Land Services, the Department of Primary Industries and Racing NSW - after reports hundreds of horses had been butchered at the location and their carcasses left in a dry creek bed.

The location of what authorities allege was an illegal knackery was first reported to police several weeks ago after nearby property owners told of a foul stench that had been occurring for some time. Horse carcasses were also seen at the location.

Council staff were able to access to the property to investigate through its powers under the Protection of the Environment Operations Act because the carcasses had been dumped in a dried water course.

No water contamination issues have been identified.

The council's general manager, Peter Thompson, visited the property himself and viewed the carcasses - believed to be in excess of 500 - and said he believed the horses were shot.

Mr Thompson said there had been an attempt to conceal some of the horses with soil.

A spokesperson for the NSW Department of Primary Industries (DPI) said its representatives and NSW Food Authority Compliance Officers attended the property on March 5.

The spokesperson said the food authority was pursuing offences under the Food Act 2003 in relation to the operation of an unlicensed meat business.

"Officers seized 300kg of meat that is alleged to be connected to the knackery operation," they said.

"Illegal backyard meat businesses pose food safety risks and impact on the national livestock identification system through loss of livestock traceability, impact market access for licensed meat businesses in the local area and compete with legitimate meat businesses.

"NSW Department of Primary Industries (DPI) is considering livestock traceability offences under the Biosecurity Act 2015."