People living close to Portbury Wharf reserve, near Bristol, complained to North Somerset Council about having to pay Â£54 annually to maintain it.
Permission for 2,600 homes nearby was granted to developers Persimmon Homes as long as the reserve was created.
Avon Wildlife Trust (AWT) said stopping the levy "threatened" the reserve.
Residents complained to the council two years ago about the yearly cost and the "lack of transparency" on how the money was being spent.
Following residents' concerns, the council said it had met Persimmon "to review the way in which the nature reserve is funded".
It said it would now take over the site and be responsible for maintaining the reserve, which has been managed by Avon Wildlife Trust (AWT) for the past five years.
A council spokesman said: "The council is experienced in managing local nature reserves and we have already spoken to the Avon Wildlife Trust about working with them to manage Portbury Wharf.
"There has never been any doubt about the importance and future of the reserve."
But Dr Bevis Watts, from AWT, said it was "hard to believe" the reserve was under threat so soon after its creation.
"The decision process to change the funding is not clear and the announcement has been made before any formal agreements completed," he said.
"We believe it is highly unlikely Portbury Wharf nature reserve will be maintained with the same benefit to wildlife under the council's plan and are calling for it to commit to ring fence equivalent funding to that raised by the levy."
Portbury Wharf, a 117 acre (47 ha) nature reserve next to the Severn Estuary between Portishead and Royal Portbury Dock, is a feeding ground for thousands of birds.
Wildlife experts are worried the upkeep of a coastal nature reserve will decline after a levy paid by nearby residents was scrapped.