The NSW Government grant was awarded to Lake Macquarie City Council to install traffic lights and associated roadworks at the intersection of Freemans Drive, Central Road and Alton Road.

The intersection upgrade was going to be the responsibility of developer Johnson Property Group through a Voluntary Planning Agreement it had with Lake Macquarie City Council for its Watagan Park subdivision project.

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But the project was delayed as Johnson requested several increases to the amount of lots it was allowed to develop before the upgrade was completed - most recently being at Monday night's council meeting.

Residents have been appealing for safety upgrades at the intersection for more than a decade after an elderly man, Charles Pointon, was hit by a car and killed in 2008. The intersection is close to several nursing homes.

Johnson Property Group director Keith Johnson said it was "a very complex and complicated intersection".

"Unfortunately the goalposts kept changing and community expectation kept changing," he said. "The design changed. One intersection became two intersections, the road became wider.

"It was very stressful for everybody involved.

"When we first got involved in the VPA, it was going to be $600,000 for the intersection and over the years it changed and now they've got a grant for $4.95 million."

Mr Johnson said the grant was a fantastic outcome for the community.

"Now they can deliver what the community expects," he said.

"They'll get the intersection built to a much higher standard."

In a further win, the money Johnson was initially going to put into the intersection will now be spent on other infrastructure.

"We're working with council now to determine where it will be invested," Mr Johnson said. "We want to make sure it stays in Cooranbong."

Lake Macquarie MP Greg Piper said he was pleased to see the intersection upgrade would finally be going ahead.

"The community has been after this and has been very frustrated, so have others including myself," he said. "It has such a long history.

"There's been so many best endeavour attempts to get this done.

"This money from the state government has just changed everything. Now it guarantees it goes ahead and at same time the developer is still putting same amount of money into something else."

NSW planning and public places minister Rob Stokes said it was "a great win for the Lake Macquarie community that will see an intersection upgraded to become considerably safer".

The funding was provided through revenue the NSW Government has collected through State Voluntary Planning Agreements.

Council said it would now work with the government in terms of the grant funding, with an aim to "deliver the project as soon as possible".

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