Transport for NSW has said the north-facing ramps, which residents and Newcastle and Lake Macquarie councils have advocated for, would add $25 million to the cost of the bypass and were not economically viable.

But with the federal government announcing that Tuesday's budget includes $360 million for the bypass, Cr Clausen called on state planners to review the project's "outstanding issues".

The state government has spent $90 million on planning and design works to date and had been set to fully fund the road's construction.

The 3.4-kilometre link between Rankin Park and Jesmond, which was costed at $280 million in 2014, had not attracted any federal funding until this week.

Cr Clausen said given the state government would now spend less on the project, the ramps should be included.

He said Transport for NSW had previously taken on board community input and altered the bypass designs.

"We have had a major victory protecting the east-west cycleway through Jesmond Park, preventing cyclists from having to stop at three extra sets of traffic lights, and getting a full interchange at the John Hunter," he said.

"There is an unresolved issue with the lack of a full north-south interchange at McCaffrey Drive. I understand that this interchange was not included due to the additional cost, but with the new Commonwealth money, this decision should be reviewed."

Newcastle council moved a motion in August calling for a rapid-transport corridor between the hospital and university. It would allow for a future light-rail, trackless tram or express bus service.

"Given the funding certainty provided with this new Commonwealth money, I call on the state government to invest some of the money it has now saved in addressing these two outstanding issues," Cr Clausen said.

"There is an opportunity for Transport for NSW to demonstrate regional leadership and deliver a solution that truly is fit for the future of our city."

Wallsend MP Sonia Hornery welcomed the federal funds but said changing the designs to add the McCaffrey Drive ramps would only delay the project even further.

"This money should now see the final part of the project out to tender as soon as possible," she said.

"I hope that the NSW government now use the money that they had set aside in the Restart NSW Fund to fund other projects in the Hunter."

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