The Downes family has announced that they have withdrawn their planning proposal for a tip in Brownlow Hill.
The family intend to make major revisions to the planned recycling and sustainability facility.
Family spokesman Max Downes said the family had spent the past few weeks listening to community concerns and had engaged with the Department of Planning, Industry and Environment.
"As a result, we have decided the proposal is not acceptable in its current form and needs to be withdrawn and extensively reviewed," Mr Downes said.
"We expect this work, which will include additional expert and technical studies, to take several months to complete.
"We may be in a position to bring forward a revised proposal next year."
This follows the family's recent announcement that they would reconsider their options for sustainable uses at the historic Brownlow Hill farm, which has been in the family since the 1850s.
"It is very important for the community to know that we have never proposed constructing a general waste dump on our land as per what has been shown in some media," Mr Downes said.
"I can say categorically that we will never, ever have a dump on our land in the future.
"Our vision is for Brownlow Hill to be a beacon of environmentally friendly, sustainable practices in south western Sydney that enable reuse of recyclable materials such as glass and plastic that would otherwise go to landfill.
"As the sixth generation to live on this land, we want to leave a positive environmental legacy for our children and grandchildren.
"We accept that our initial planning proposal was too broad in its scope and too general in detail and this has caused community concern, which we deeply regret."
Mr Downes said the family had walked with many stakeholders over the land, talked with them about their vision and heard their views on what would be appropriate in the community.
"We respect these views and want to work with the community to develop something we can all be proud of," he said.
"We are very committed to discussing our future plans with the community.
"Once we have completed the process of reviewing the proposal, we will conduct extensive community engagement within the local area on all aspects of our ideas."
Residents became concerned about the planned resource recovery facility and landfill at 217 Brownlow Hill Loop Road, Brownlow Hill earlier this year.
The 15-hectare site would have been used to receive, handle and process construction and demolition waste, plastics, tyres, glass, contaminated soils, composting and green waste.
It is estimated the proposed recycling facility would process up to 420,000 tonnes of waste each year.
Neighbouring resident Simon Peacock told the Advertiser last month the Brownlow Hill was not suitable for industrial development.
"We don't have the infrastructure for this kind of thing," Mr Peacock said.
"Our roads and power network would struggle to cope."