Reopening the cafe depends on the council getting viable insurance for the site, with the council confirming a national search was underway to find an insurer willing to provide coverage.

After talks on the weekend and Monday, the council announced a plan to open a temporary cafe beside the Stockton ferry terminal, which Lexie's on the Beach owner Nick Sovechles says is likely to be called Lexie's on the River.

This business would open and provide employment for at least some of the 27 casuals out of a job with the beach cafe closure, while the council and Mr Sovechles work to get the cafe opened at its traditional home.

The council closed Lexie's two Fridays ago on February 14 after an independent risk assessment found the building was at "imminent risk of a one-in-two-year storm event.

The council said on Monday that the assessment found there were only 70 cubic metres of sand left in front of the cafe building as a buffer against the surf.

Mr Sovechles had leased the cafe building three years ago on a month-to-month lease. The council said the ferry terminal cafe would normally go to the market through a call for expressions of interest but this requirement would be waived given the "unfortunate decision to close Lexie's".

Both Mr Sovechles and Lord Mayor Councillor Nuatali Nelmes described the decision as positive.

"While we would have loved for the Lexie's Café to continue trading at Stockton Beach as it has for many years, once City of Newcastle officers were presented with the coastal risk assessment review, the responsible action was to act immediately," Cr Nelmes said.

"We are exploring all options to secure insurance for the building. While that process is underway, I've asked for the construction of a temporary café to the east of the Stockton Ferry Terminal, away from the erosion threat, as an interim measure.

"There are many hoops we need to get through, but we have made it clear to Lexie's management that we want to work together towards a solution for Lexie's that will protect local jobs and safeguard the local economy.

"We know that Lexie's attracts many visitors and tourists to Stockton, just as the nearby Stockton Holiday Park does."

Mr Sovechles said reopening Lexie's at its existing site was his preferred option but he understood the council needed to have the building insured.

"What is clear is that the Stockton community cannot take many more financial hits. It needs commercial ventures that attract people to Stockton, and a café near the ferry is one way of doing that," Mr Sovechles said.

He called on the NSW government to support the council work towards a long term solution to Stockton Beach erosion.

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