In a major breakthrough in the heartbreaking saga, Local Government Minister Shelley Hancock told community and council representatives on Monday afternoon that she had classified the suburb's severely eroded foreshore among the state's coastal erosion hot spots.

This means that City of Newcastle will now be able to apply for additional funds to deal with the erosion crisis.

Ms Hancock, who was joined by Environment Minister Matt Kean, Newcastle Lord Mayor Nuatali Nelmes and general manger Jeremy Bath, later told about 100 residents at Stockton Surf Life Saving Club that she was keen to see the beach rebuilt as soon as possible.

She has promised to deal with the City of Newcastle's funding applications for the works as a matter of priority.

The state government grants of up to $1.5 million will need to be matched by the council.

"I have given an assurance to the council that within a few days they will have an answer on their funding applications rather than six months," she said.

"There's a lot of competition for that money but I see the urgency here and that is why I'm really prepared to support the council at this stage.

"In short, what we wanted to do today was work together with the council to come to an agreement on what the best solutions are for the short medium and long term."

In addition to sand replenishment to allow the surf club's nippers program to commence, short-term works will include shoring up existing sea walls and asset protection works along Mitchell Street.

City of Newcastle chief executive Jeremy Bath said the declaration of Stockton Beach as a 'hot spot' represented a significant turning point in the state's government's position on coastal erosion.

"What you have seen today is a state government that after many years of not wanting have a significant role to play in a long-term solution for coastal erosion at Stockton, has now put its hand up and said 'we are at the table'," he said.

"It's really now up to the City of Newcastle to take advantage of that concession from the NSW government and make sure we put everything on the table as quickly as possible when it comes to funding support."

It remains unclear where the sand for the short-term beach replenishment works will come from, however, there is a strong possibility that it may need to be transported by trucks despite concerns about their impact on local roads.

Sand scraping, or the transfer of sand from the north to the southern end of the beach, has previously been cited as a viable option for replenishment. However, the council said last week there was currently not enough sand at north Stockton to consider using the method.

Another alternative, offshore dredging, which is used for beach replenishment on the Gold Coast, is currently illegal in NSW.

But Ms Hancock said she was open to all options for sourcing sand for the long-term replenishment of Stockton Beach.

"I'm not writing anything off as an option; nothing is written off as a solution but let's all agree on what the solutions are and work with the community and the council," she said.

The ban on offshore dredging is currently overseen by Deputy Premier and Minister for Trade and Industry John Barilaro.

The government would need to create new legislation if the practice was to be used at Stockton.

"Offshore mining classes sand as a mineral so it is restricted at this stage, but it occurs in Queensland," Ms Hancock said.

"I said to the committee today that is an option that is not off the table necessarily because anything can be done. If we all agree it should be done then we will try to do it."

"We haven't looked at it as an obstacle because of cost but it's always been regarded as a mineral and therefore there are environmental implications."

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