Din l-Art Ħelwa said today it was alarmed by the way the government was handing over the site of the Institute of Tourism Studies in St George's Bay.
A €300m investment in a hotel, mall and entertainment facilities was announced by the dp group last week.
"By signing the agreement with the developers, the government has committed itself to the development as proposed, without taking into account urban planning considerations," the environment NGO said.
"The government’s commitment pre-empts the planning process and makes it difficult for the Planning Authority to seek improvements to the proposed development. It also preempts the Planning Authority's revision of the Paceville masterplan."
It said the scale and intensity of the proposed development was excessive for the site and the area and there was no consideration on the way the buildings will impact the immediate surroundings.
There is a lack of public open space within the site. Furthermore, the development does not appear to conform to local plan policies. The British barrack blocks, scheduled at Grade 2, will also be demolished.
"The parking and traffic problems in the area will worsen. Instead of using the site to ease some of the parking pressures on Paceville, the government will be allowing a development that will make the Paceville parking situation many times worse," it said.
Din l-Art Ħelwa urged the government to allow the planning process to take its course, without interference.