He compared the waivers to municipal zoning variances.
Critics have condemned it as the single worst decision ever to come out of the agency.
"It is so vague that it opens the door to all forms of abuse, which will result in protections of the environment and public health taking a backseat to politics and economic development," said Bill Wolfe, director of New Jersey Public Employees for Environmental Responsibility.
"This rule is so bad we will challenge it through every means possible: the Legislature, politically, and in the courts," said Jeff Tittel, director of the New Jersey Sierra Club.
Supporters say it allows the agency to apply common sense to a hash of conflicting regulations.
"Some of the rules and regulations have been so ironclad and so restrictive that . . . they do more to inhibit economic growth and development and good planning than they do in fostering it," said William G. Dressel Jr., executive director of the New Jersey State League of Municipalities.
To get a waiver, applicants would have to show that conflicting rules among agencies are adversely affecting a project, that a net environmental benefit would be achieved, or that an undue hardship exists. A formally declared public emergency also would be a reason under the rule.
Martin pledged to review all the waivers in the first six months of the program "to make sure they are being treated consistently."
He promised "transparency," saying all applications and all decisions would be posted on the DEP's website.
Critics contended that was not enough.
"Neighbors of proposed projects won't be checking online and may not realize environmental regulations no longer apply to a development near their home," Tittel said.
Martin said neighbors would be notified and given a chance to comment "only in cases where the underlying permit required that kind of notification or input."
He said that the rule had been reviewed by the state Attorney General's Office and that he was "confident of the legal standing. We created the regulations; we can modify them."
Although he did not give specifics, he said situations in which environmental rules conflicted cropped up every day.
"One set of our rules would allow people to do something; another set doesn't," he said. "They clash all the time."
The agency said it received more than 500 oral comments and written submissions during a public-comment period on the waiver proposal last year.
Dressel, of the league of municipalities, said support of the rule "is not saying we're disregarding the sound environmental standards. All we're saying is that you have to take all of this into consideration and you have to make decisions that are also based on fact, based on science, and are reasonable."
Jerrold Bermingham, an executive vice president with National Realty and Development Corp., cited a Hunterdon County store that had an outdated septic system. The owner wanted to improve it, but the permitting process was so onerous that an application was never even submitted.
Requests for waivers will be accepted starting Aug. 1.
Environmental groups said the waiver criteria were so vague as to allow virtually any project to get one.
Doug O'Malley, field director for Environment New Jersey, said the waiver process would undermine public trust in government because not every applicant would have to meet the same state requirements.
As an example of what could happen, he cited a contentious Hunterdon County development project, Windy Acres, that was scrapped years ago because it would have harmed a stream that was used as a drinking-water source. The developer tried to get exemptions but was unsuccessful, O'Malley said.
Today, he said, the outcome might be different.
"Everyone should play by the same set of rules," O'Malley said. "If you allow everyone to get a variance, our environmental regulations become Swiss cheese."
Contact Sandy Bauers at 215-854-5147, firstname.lastname@example.org, or follow @sbauers on Twitter. Read her blog, "GreenSpace," at www.philly.com/greenspace