Origin Energy is set to pick up a multi-million dollar bill to build a new sport and recreation centre in Lake Macquarie after the NSW government finally announced the defunct Myuna Bay centre would not be reopening.
Acting Sports Minister Geoff Lee visited Myuna Bay on Thursday morning to confirm the site's permanent closure, more than 250 days after the centre was abruptly shut due to the risk the nearby Eraring power station ash dam posed in the event of a major earthquake.
Mr Lee said the long-awaited second review of the closure had concluded there was an "intolerable" risk to life if the ash dam wall ruptured in the event of an earthquake, which was considered "unacceptable".
"We understand the sport and rec centre is an integral part of the Lake Macquarie community and fast-tracking a replacement is our priority," Mr Lee said.
"A new centre will be purpose built to accommodate the same activities as the current facility including direct access to the lake for watersports."
Lake Macquarie MP Greg Piper said it was ultimately the best outcome for the community given the historic Myuna Bay centre could not be reopened.
"A second independent report has come back and unfortunately it recommends that the original centre cannot be reopened," Mr Piper said.
"But weve been able to negotiate an agreement that will deliver a new state-of-the-art sport and rec centre, as well as deliver compensation to affected parties, protection of the original site, and options for staff."
Staff were told on Thursday morning they would be offered voluntary redundancies or could relocate to another Office of Sport centre.
Mr Lee said they would be given "priority" for employment at the new centre when it opens.
The new centre will be built on Origin Energy-owned land in south-west Lake Macquarie.
The planning, design and construction of the centre is expected to take at least two years but will be "fast-tracked", Mr Lee promised.
Myuna Bay Water Ski Club and the Morisset Rotary Club, which both had a presence at the Myuna Bay centre, will be compensated for the impact of the closure.
Mr Lee said the water ski club would likely regain access to Whiteheads Lagoon sometime in the future.
Origin Energy will "revegetate" the existing centre's site and it will be returned to the community, Mr Piper said, adding the land would not be sold off for other uses.