A full environmental assessment will be conducted on a proposed $350 million upgrade to the Nyrstar smelting facilities in South Australia after the project was declared a major development.

Planning Minister John Rau ruled on Thursday the redevelopment of the Port Pirie facility, was of major environmental, social and economic importance to the state.

The declaration ensures the project would be subject to the highest level of assessment along with community consultation and also triggers an environmental impact statement.

The minister said the proposed redevelopment in Port Pirie would secure thousands of jobs in the region and deliver a cleaner processing and recovery facility to significantly reduce lead emissions.

But the Greens described the project's major development status as a double-edged sword, leaving final approval for the redevelopment with the state government.

"The people of Port Pirie have every right to be sceptical about the process, given that the final decision will rest with the state government," Greens MP Mark Parnell said.

"The government will need to work very hard to convince people that it will impartially assess the project."

Federal Regional Development Minister Simon Crean welcomed the state government's decision saying it would help position the region to take advantage of emerging opportunities.

"Growth in the mining sector and the proposal to redevelop Port Pirie are both key factors in diversifying the economic base of the upper Spencer Gulf," Mr Crean said in a statement.