The Porsche Centre Newcastle is slated for development on a greenfield site formerly operated by AGL at 34 Griffiths Road and will open about mid-2021.

McCarroll's CEO Simon McCarroll said the company - which has multiple dealerships in Newcastle including its luxury, multi-branded centre Wickham - had been involved in a tender process since mid 2018.

"We had information we had to submit - what we thought the potential of the area was and why it would be good to do something in the area - to show them that we have confidence that once you open the business it can do what it needs to do," he said.

Though still finalising aspects of the heads of agreement, he said McCarroll's would have an investment in the property and new facility and "everything that goes along with setting up a new dealership and bringing on a team with it".

"We haven't finalised the design and cost in investment but given what we are looking at it will be a multi-million-dollar investment, there is no doubt."

Mr McCarroll said the choice of Griffiths Road was strategic.

"It's a good location from an exposure point of view, a lot of cars are going in and out come along there, and in addition the facility we have has a lot of space, so we can accommodate the business comfortably and create the right dealership."

He described the deal as a coup for Newcastle and a sign of its growth.

"It's great for us to be able to work with a brand like Porsche, which has a rich heritage in what they do but for the area, a brand like Porsche with its place in the market, to have representation in Newcastle is a bit of a coup and recognises the growth that is happening in the region and the clients it already does have up there," he said.

Founded in 1978 in Cooma, McCarroll's is a family-run business, with Mr McCarroll's mother hailing from Newcastle, where the company began operations in 1999.

Mr McCarroll said Porsche sold a range of products that suited the Newcastle market.

"Porsche and ourselves are confident the market is there to enjoy them," he said.

Porsche Cars Australia CEO Sam Curtis said the company had identified Newcastle and the greater Hunter region as a potential area for network expansion some years ago.

He said the company chose McCarrolls after extensive market analysis and a thorough selection process and was impressed by its "strong history in premium automotive retail" and local experience.