Mayor Kay Fraser announced the new proposal at the Bath Street site on Thursday, almost a year after the elected council pulled the pin on plans for a six-storey mixed-use development.

The new building, which is proposed to have a footprint of about 150 square-metres, would likely incorporate a restaurant/cafe and a small retail or tourism business.

It would be built further back from the water and likely feature a deck for dining. A car park would be built at the rear while the grassed areas would be for community use.

The council envisions events at the site with the open-space areas temporarily used to house food trucks, an outdoor cinema or stalls.

Property manager David Antcliff said the proposal celebrated the waterfront site's "versatility and open space".

"A new small-scale building is proposed for the space providing opportunities for casual lakeside dining, boutique functions and pop-up community events," he said.

"Taking inspiration from its scenic lakeside location and adjacent five hectares of foreshore, the proposed precinct will feature indoor and outdoor dining opportunities, as well as pedestrian access improvements and new car parking.

"There is also an opportunity for a complementary small business such as kayak, bike or boat hire."

The council would fund and construct the building, and then lease the premises.

It has launched a community consultation process and is calling for feedback, mainly via shape.lakemac.com due to COVID-19.

"We are asking our community to reflect on the proposal presented to them and the benefits it could deliver for Toronto and western Lake Macquarie," Cr Fraser said.

"We have listened to our community and undertaken a robust sustainability review of the project and the Toronto foreshore master plan.

"I believe this is a really positive outcome and I'm looking forward to hearing what residents think."

The feedback will inform the ongoing development of the foreshore master plan.