The land-use strategy, a joint project between Port Stephens and Newcastle councils, includes a vision for a "large-format" supermarket, shops, housing and a library on the 84-hectare site of the Stockton Centre.

The strategy says the state government has not decided how it will use the Stockton Centre site in the future, but it recommends drafting a master plan to "support any future change in land use".

Defence Housing Australia has applied successfully to the two councils to rezone land at Fort Wallace and the disused Fern Bay rifle range to allow for up to 400 houses.

It hopes to have housing completed at Fort Wallace in late 2021 and at the rifle range in late 2022.

The councils' strategy also includes a commitment to advocate for Nelson Bay Road to be widened to dual carriageway from Stockton Bridge to Newcastle Airport.

It demonstrates how an area stretching from an upgraded sports complex at Corroba Oval to Fern Bay could develop over 20 years.

It maps out new cycleways, footpaths, walking trails and bus stops, better access to the beach beside the rifle range and the expanded Seaside housing estate at Fern Bay.

It also includes a new ferry terminal at North Stockton.

Newcastle councillors received a draft of the plan in May but deferred placing it on exhibition until after a workshop with Port Stephens councillors in August.

Fern Bay/Fullerton Cove Progress Association chair Sally Johnston told the Newcastle Herald in May that the community overwhelmingly supported a supermarket during the strategy's community consultation period.

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