A bill is expected to be passed through NSW parliament this week for the compulsory acquisition of the 92 hectares and its containment cell from the smelter's administrator Ferrier Hodgson, that merged with KPMG earlier this year.

Property Minister Melinda Pavey introduced the Lake Macquarie Smelter Site (Perpetual Care of Land) Bill on Tuesday afternoon.

It will be fast-tracked through the lower and upper house with bipartisan support. The acquisition is expected to cost taxpayers millions.

The government has estimated it will cost $67 million for the long-term maintenance and monitoring of the 45-metre-deep containment cell, that holds 1.9 million cubic metres of hazardous material, a water treatment plant and other contaminated land.

Ferrier Hodgson has previously said it expected to raise $57.7 million in land sales at Boolaroo.

It is understood the government acquisition will put previous expressions of interest from IKEA and Costco for land back on the table.

The acquisition will see the overall site transferred to Hunter and Central Coast Development Corporation, which will then oversee the sale of parcels of land to those that had prior options with Pasminco Cockle Creek Smelter (PCCS), the company set up by the smelter's administrator, Ferrier Hodgson.

Ms Pavey said the bill would "ensure the land at the site of the former lead and zinc smelter ... is managed properly in perpetuity".

"This will reduce any risk to the environment and the community from residual contamination produced over the 100 years or more of the smelter's operation," she said in state parliament.

Operations at the site ceased in 2003 and remediation works have taken place in the years since. But the site has been effectively frozen from further development under the administrator.

"The NSW government is stepping in to break a stalemate and bring significant benefits to the Lake Macquarie community," Minister Pavey said in a press release.

Lake Macquarie MP Greg Piper said the bill lifts "more than a decade of doom and gloom over the area".

Ms Pavey said Pasminco would be soon be placed in liquidation, and it was therefore "inevitable" responsibility for the "long-term management of the containment cell and other land will devolve to the government".

She said the site's containment cell spanned 20 hectares and now contained 1.9 million cubic metres of material, and had associated infrastructure including a water treatment plan.

"The cell and water treatment plant will require an ongoing maintenance and repair or replacement of components in the longer term including, potentially, the capping of the cell," she said.

"There are other areas of the former smelter site, such as Munibung Hill, that are now rezoned for environmental conservation and also require an ongoing environmental management."

She said understanding "the government reasons for acquiring this site" required reflection on its history.

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"For too long there has been an impasse at the site, where economic and social opportunities weren't being realised, because its long term environmental needs weren't being appropriately addressed," she said.

"By taking on the environmental management of the site, the government is now able to open up the site's potential for a range of uses. Locals want to see this area reach its full potential and we are taking significant steps with this legislation to realise this."

Mr Piper, in reference to an economic analysis completed previously, said the site had the capacity to generate more than 2600 new jobs and $1.826 billion in economic benefits for the region.

"Make no mistake, this deal will see Boolaroo become an economic powerhouse and the flow-on effect to surrounding areas will be very substantial," he said.

The independent MP said previous land options with IKEA and Costco had almost been "lost to the region" but "this deal puts them firmly back on the table".

"It's been disappointing that legal mechanisms have been used by the administrator to obstruct and frustrate good outcomes for so many years, and indeed by Pasminco which left this community with an incredibly difficult mess to deal with when they walked away," he said.

"But I'm very pleased to say that those days are now behind us and we can look forward to a new era of economic prosperity."

Proceeds HCCDC receives from land sales will be paid into a special fund established by the legislation that will cover the cost of long-term environmental management and monitoring.

The state government's Waste Assets Management Corporation, with regulatory oversight from the NSW Environment Protection Authority, will assume responsibility for environmental management of the site.

Boolaroo Action Group spokesman Jim Sullivan welcomed the government stepping in, describing it as a win for residents.

"Now we need the government to develop a plan to deal with the contamination on peoples' land around the smelter site," he said.

"This is great news economically and for the community, but we need to remember that the cost of cleaning up pollution from Pasminco in surrounding suburbs has been placed on the homeowners and the government needs to intervene to change this."