Western Australia's Environmental Protection Authority has recommended approving the Valhalla Gas Exploration and Appraisal Program in the Canning Basin, about 120km southeast of Derby.
It could result in Bennett Resources, a subsidiary of US-based Black Mountain Energy, drilling up to 20 wells in the Fitzroy River flood plain to target fossil fuels located up to four kilometres underground.
Outraged conservation groups have vowed to appeal the regulator's decision, with a record number of submissions expected to be lodged with investigators before a February 10 deadline.
Environs Kimberley says the community doesn't want the region turned into Texan gas fields.
"The risk to our clean water, threatened species and the National Heritage listed Martuwarra Fitzroy River is too high," executive director Martin Pritchard said.
"Our grounds of appeal include that the (authority) has failed to adequately assess risks to threatened species, risks to human health and social surroundings, including toxic chemicals."
Conservation Council WA said the regulator "got it seriously wrong" but the final decision rests with WA Environment Minister Matt Swinbourn.
"It's clear the WA community doesn't want fracking in the Kimberley," executive director Matt Roberts said.
The regulator has not adequately addressed the project's potential risks, including the impact on groundwater and the stygofauna that live in it, the council said.
"By engaging with this appeals process, we hope to provide the minister with the information he needs to make the right decision," Mr Roberts said.
Gas explorer and producer Buru Energy Limited said the authority's recommendation for the Valhalla project was a "win" for WA and reinforced the critical role Kimberley onshore gas could play in securing its "urgent" energy needs.
"It signals to investors and the community that the Canning Basin is open for responsible, regulated energy development," chief executive Thomas Nador said in a release to the ASX.
WA Premier Roger Cook previously said the EPA's decision was "not a green light for fracking".
"The EPA has made a recommendation that the particular project in question, the Valhalla Project, can have its environmental impacts managed in a way that means they are comfortable that it goes ahead," he said.
"I suspect that decision will be appealed, so I won't make further comment."
Mr Swinbourn said he would consider the appeals convenor's advice once the process was finished.
Fracking is banned in 98 per cent of WA.
However the government said its policies were "informed by an independent scientific inquiry, which said fracking could occur in WA with appropriate regulations".
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