Friends of Nyah Vinifera Park, represented by Environmental Justice Australia, are fighting a Victorian government project aiming to restore more regular water flows at the Nyah floodplain near Swan Hill in northwest Victoria.
The project involves building containment structures, block banks and spillways to manage water flows.
Opponents say the works will justify providing less environmental water under the Murray Darling Basin Plan, will damage local landscapes and destroy cultural heritage.
"We want real wetland flooding rather than uber-engineering projects that won't achieve the good environmental outcomes," Friends of Nyah Vinifera Park chair Jacquie Kelly said in a statement.
"With the millennium drought, climate change and water mismanagement, the floodplains are dying of thirst.
"They need regular water, but this risky and destructive water offset project is the wrong approach."
The Nyah project is one of four approved river engineering schemes, with four more assessments on hold.
A Victorian government spokeswoman said floodplain restoration projects were assessed through rigorous state and Commonwealth approvals processes, and would help restore the health of about 14,000 hectares of high value floodplain.
"These projects deliver proven environmental outcomes and restore cultural values along the Murray River," the spokeswoman said.
"Four sites, including Nyah and Vinifera, were found to provide long-term benefits to biodiversity that outweigh the impacts of construction activities."
Another, the Burra Creek Floodplain Restoration Project, was withdrawn by planning minister Sonya Kilkenny in January due to unacceptable environmental risks.
Murray Lower Darling Rivers Indigenous Nations spokesman Brendan Kennedy said the nearby forest was home to Watti Watti ancestral burial mounds, middens, ceremonial grounds and other rich cultural heritage.
"It's like our crown jewels," Mr Kennedy said.
"If they put in pump sites and other structures, they will own the locations they build them on.
"It's an ongoing dispossession of our land and our water."
The federal government said it was aware the court application had been made.
It noted basin states were responsible for developing and delivering such projects and obtaining the necessary planning approvals.
Non-profit campaign group Environment Victoria has been a vocal opponent of river engineering projects, campaign manager Greg Foyster said.
"The projects involve cutting down hundreds of big old trees to make way for new infrastructure, which will send in just enough water to keep select parts of the floodplain on life support with levees and regulators," Mr Foyster said.
He said the floodplains needed a return to natural water flows.
"That means more regular pulses of water to spread over riverbanks and into low-lying wetlands and forests.
"These small overbank flows, below the minor flood level, could reinvigorate the hundreds of native species that rely on healthy wetlands and floodplain forests in the Murray-Darling."
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