The stag was most likely slain by trophy hunters seeking its highly prized antlers.

The beheaded carcass was discovered on Monday in American Creek, just 10m behind homes in Govett Cres.

The callous act will do nothing to help the reputation of the Illawarra's amateur hunters, who have been fighting to establish their credibility in the face of sustained criticism from animal welfare groups.

Figtree resident Lorraine Holmes was appalled by the discovery.

"It's horrible to think there's someone out here shooting and killing - a stray bullet could go anywhere," she said.

"Even worse, they stood here and butchered it. It's horrid."

Ms Holmes said Wollongong City Council had failed to dispose of the dead deer despite repeated requests.

She expressed fears the carcass would contaminate the creek.

Her neighbour Phil Hanigan said he was aghast hunters were operating so close to his home.

"We get all these yahoos down here shooting all the time. They shouldn't be shooting so close to a residential area," he said.

Illawarra Sporting Shooters' Association president Alois Ambs, slammed the decapitation and said it contravened hunting guidelines.

"It's absolutely not standard practice - it's disappointing," Mr Ambs said.

"The least they could have done is drag it to a place where it's no problem to anyone - they obviously just wanted to get the head off and couldn't care less about the rest."

The deer head would most likely be taken to a taxidermist to be mounted, then displayed as a trophy, he said.

Mr Ambs said licensed hunters were trained to properly dispose of their quarry by burying it.

While deer have been named as Wollongong's No 1 pest, fierce debate rages about the best way to reduce their numbers.

Amateurs who cull deer under the NSW Game Council's so-called "conservation hunting" program have been seeking to expand their operations, but have come under fire from animal welfare groups.

Mr Ambs conceded the incident would do little to further their cause.

"The guys hunting deer properly don't want to see it done like that," he said.

"No wonder people say they only want professionals."

A council spokeswoman said the deer was found on private land and it was liaising with the landowner to have it removed as soon as possible.

The council's manager of environmental strategy and planning, Renee Campbell, said the Game Council held responsibility for enforcing recreational deer hunting.