Honeysuckle Drive traffic will be diverted through part of Throsby car park for up to a year as the western end of the harbourside road is permanently realigned.
The diversion, part of Hunter and Central Coast Development Corporation's $55 million infrastructure and public domain investment in the area, will commence in March once Throsby car park is reconfigured.
New parking is set to be created adjacent to Hannell Street, but re-routing Honeysuckle Drive through the popular commuter car park will result in a net loss of about 80 spaces.
HCCDC acting chief executive officer Valentina Misevska said the diversion needed to be put in place to ensure Honeysuckle Drive remained open while the realignment is completed.
She said the project was the final stage of HCCDC's works at the western end of Honeysuckle and was necessary for the long-term improvement of the precinct.
"Honeysuckle is changing, and we are working to help facilitate the final chapter of Honeysuckle's transformation by delivering a significant package of infrastructure works," she said.
"Straightening Honeysuckle Drive and rebuilding Cottage Creek bridge will decrease the risk of future flooding as well as create better safety in the precinct.
"As with any construction, it will create some localised disruption for vehicle, pedestrian and cyclist movements for a short period."
Throsby car park has 371 spaces, according to a city centre parking guide, and is full most weekdays.
The loss of 80 spaces will likely go down like a lead balloon with city workers and put pressure on the availability of parking in the surrounding areas.
The works will start in early March with the diversion in place later that month.
A pedestrian and cyclist path along the car park's northern edge will also be moved towards the harbour.
"Safety is our number one priority and we are focused on maintaining safe access during construction, which is likely to continue until the end of 2020," Ms Misevska said.
"We will put signage up around the car park and during construction as necessary.
"We will also maintain up-to-date information on our website and Honeysuckle Facebook pages."
Possible alternatives for workers squeezed out of the car park include paid-parking in other parts of the city or a long walk from on-street parking in nearby suburbs.
City of Newcastle still funds park-and-ride shuttle buses that run from McDonald Jones Stadium to the city centre every weekday morning and afternoon.
It also funds on-demand transport, which was last week revealed to be only attracting a few passengers per day, operating between the city and southern suburbs.