It has quite a bit to do with the State government really. Transport infrastructure (highways, train lines, bus services) must be provided to the site which is a state gov responsibility. Zoning planning for the Sydney basin to keep residential properties away from the anticipated flight paths is a state gov responsibility.
The are many more issues that will require cooperation between the state and federal governments.
Importantly, the final decision will have to be agreed upon by both Labour and the Coalition federally and within NSW otherwise it will continue to be a political hot potato and no government will take action as it would be political suicide.