A local community group has been awarded more than $200,000 by the state government to rehabilitate bushland along the Kangaroo River at Kangaroo Valley.

The funding is part of an $8 million government program to fix degraded natural bushland sites.

Kiama MP Gareth Ward says the Kangaroo Valley Environment Group plans to re-generate a 27 kilometre stretch of the River which will involve working with more than 40 local landowners