The 6,000 wild horses running free in the Kosciuszko National Park will be cut to just 600 under the plan.
"Horses are an introduced species that are competing with Australia's native animals and flora in the national park and their numbers are out of control," environment minister for the state government of New South Wales, Mark Speakman, told the broadcaster ABC.
The plan is open for public comment until 8 July and is expected to provoke heated debate.
Wild horses, known as brumbies, are a popular figure in Australian folklore and the subject of poems, songs, children's books and movies.
The government has ruled out aerial shooting of horses from helicopters which has provoked enormous outcry in the past. Many horses shot from helicopters died slow and painful deaths.
Over the next 20 years a range of more humane methods including trapping, fertility control and ground shooting will be used, Speakman said.
"Wild horse management is an emotive and complex issue. There are diverse opinions in the community and often deeply held views which polarise stakeholder groups," he said.
"It is clear, however, that the broader community values the unique environmental values of Kosciuszko National Park and looks to the National Parks and Wildlife Service to protect these values."
Brumbies currently run wild across half the highland park, but underthe plan 600 will be left alive to roam in sustainable parts of the park.
- DPA