The University of Sydney has decided to stop its investments in the Whitehaven's controversial Maules Creek mine following widespread protests from environmental groups.
The university also said that it is consulting with its advisers and stakeholders to review its investment policies, after protesters sent around 18,000 emails to the varsity criticising its policy.
A Sydney University spokeswoman was quoted by The Sydney Morning Herald as saying: "The University has issued an instruction to its Australian equities managers to make no further investments in the coal and consumable fuels subsector of the ASX.
"The institution is yet to decide what to do with existing coal investments in its $1bn portfolio, although divestment of its $900,000 holding in Whitehaven is one of 'various options' being considered."
The protests were carried out by many environmental groups, including Greenpeace and NSW Minerals Council.
According to Greenpeace, the University is investing in the mine, which is expected to release 30 million tonnes of carbon dioxide a year, causing the destruction of endangered forest, farmland and indigenous heritage.
Earlier this year, Northern Inland Council for the Environment filed a lawsuit against the Maules Creek project in Sydney Federal Court under the Federal Environment Protection and Biodiversity Conservation Act.
Greenpeace campaigner Nikola Casule told The Guarding that: "Whitehaven represents everything that is wrong with coal mining.
"While this announcement from the University of Sydney is an important first step and a welcome one, because they are taking a leadership role and acknowledging these investments are unethical, the university still hasn't made any commitment to divesting the $1m still invested in Whitehaven.
"We're calling on the university to now take strong action and divest."