NSW authorities are investigating the discovery of hundreds of butchered horses on a property in the state's south.

Wagga Wagga City Council said it was leading the investigation with NSW Police and other agencies after reports horse carcasses had been dumped around a dry creek bed near Wagga Wagga.

It said more than 500 horses appeared to have been slaughtered over a long period of time.

"It is estimated that there are in excess of 500 horse carcasses," council's general manager Peter Thompson said in a statement.

Mr Thompson said council had received a tip-off about the horses eight weeks ago, and visited the property with other agencies four weeks ago.

He said the carcasses were a confronting sight.

"One pile was 200 [horse carcasses] and then we did rough counts on other piles on various locations throughout the property," he said.

"An attempt had been made to cover up those horses with soil.

Mr Thompson could not confirm how long the alleged illegal knackery had been operating.

"Some of these carcasses were no more than skeletal remains while others were killed relatively recently," he said.

"Once the extent of the operation had been identified, NSW Police and other state government agencies began collecting evidence for possible offences and regulatory actions under a range of NSW state government legislation."