NGS announced last month its preschool - which has been running for 22 years and charges $84 a day - would not operate from the campus from 2021.

Instead it has partnered with - and is encouraging families to consider - the privately-owned East End Early Education and Preschool, which is "three minutes' walk" to its year five to 12 main campus on The Hill.

It has held spaces all year for current and future children and will operate 7am to 6pm for 50 weeks of the year.

Head of School Erica Thomas said closure was a difficult but necessary decision so NGS could proceed with "big plans" for the campus, which has 220 kindergarten to year four students.

Ms Thomas said the campus used to be the Newcastle Teachers' College and some buildings were at "end of life". She said three of the campus' five buildings would be demolished: the preschool on Corlette Street, the staff building and the administration building.

The main classroom building - the Ark building - and the hall with attached classrooms will remain. Ms Thomas said the school had appointed architects SHAC to draw up designs for a new building that will increase capacity, and a project manager. The works are part of the school's masterplan.

"We're going to spend the next six to nine months working to get all the approvals and things we need for a brand new classroom block that will go along, we hope, the Union Street side," Ms Thomas said.

"What we want to be able to do there is to finally modernise all of our school. We might turn the Ark building into some of the admin area of the school...change the orientation of the school.

"I'm hopeful - if we get what we'd like to see - I want to take it off the ground, because... it would give us a huge undercroft space that we need. The architect hasn't designed it completely yet but I think we will end up having two levels."

Ms Thomas said she expected construction would not start for at least 12 months and that a second building may follow later.

"All schools in Newcastle are finding their numbers are rising, the city itself is changing and there are more people moving here constantly, I think every school is finding that," she said.

"Most schools around us - and us - are dealing with a three to five per cent growth per year."

Ms Thomas said the preschool had been operating at capacity in recent years, with 39 children. She said at least 25 would move to East End next year.

"Our families will have a business relationship with East End... and what do we get out of that though? They get our students, but then they pass them back to us.

"They will continue to promote us and we will promote them."

She said East End would offer four-year-olds access to a NGS School Readiness Programme, which the school will "put some resources" towards.

"We have to assume there's a staffing cost and some resourcing costs," she said. "I think we'll get it in return. We don't want to come out of early education completely, because I think it speaks to who we are as an organisation. Yes there are some costs involved, but I do believe that those costs are things that are sustainable."

NGS will design the programme, which will include visits to the school.

"I can send down some additional staff to add value to that programme, we might send in someone to do STEM work... or art," she said.

"We don't want them to lose complete contact without being in the school environment, because that's important, particularly as they are about to move into the school."

Independent Education Union Hunter organiser Therese Fitzgibbon said the union was aware of the closure.

"We're aware the transition from preschool to long daycare may create some complexities," she said.

Ms Thomas said facing transition had been "challenging" for the five permanent and three casual preschool staff.

She said one would stay to write and oversee the programme and the others had been interviewed this week for positions at East End.

"Some of the staff have been there for 22 years," she said.

"They're wonderful. I think 12 years is the most recent one's service so we're talking a long period of time.

"They love the kids and they get to see the kids go all the way through the school. This is what I don't want to lose.

"I've got year 12 students that have just left who went through that preschool."

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