A property to host the state's first Koala habitat reserve has been purchased by the government, on the Southern Highlands.

The announcement under the $10 million acquisition programme was made this week by state member, Pru Goward and Environment minister, Gabrielle Upton.

Located on the Wollondilly River, south-west of Moss Vale, the 402 hectare property, forms part of the southern highlands habitat link that joins the Blue Mountains to wilderness areas of the Morton National Park.

State member Goward says the area will provide living space for 1000 koalas and will allow recolonisation.