The project, that was rejected by the NSW government for funding, stretches along Barrie Crescent, from Stone St to Griffith Ave, encompassing about 15 private properties, five roads and a beach car park.

About 1100 Kyowa rock bags will replace sand bags at the erosion hot spot, that used to be the site of the Stockton day care centre before it was demolished in October 2019.

The 1932 building, which once housed the north Stockton surf club, was demolished after unrelenting erosion caused structural damage.

Council contractors have spent months filling the rock bags on the ballast ground off Fullerton St and trucks began transporting them to the beach on Monday.

The works, expected to take three months, includes digging out the existing sand bags and replacing them with rock bags and a limited number of sand bags.

Under Stockton's Coastal Management Plan (CMP) approved by the NSW government last year, the site was to have a revetment, or sloping seawall, built to stop the erosion, but the council changed the project to use rock bags.

Projects approved under CMPs are eligible for 2:1 funding from the NSW government, but projects not approved under CMPs are only eligible for 1:1 funding.

A council spokeswoman confirmed a $2.076 million funding grant application for the rock bag wall was rejected by the NSW government under its Coastal and Estuary Grants Program.

She said the change to install rock bags was supported by the Stockton Community Reference Group and rock bags were identified in the CMP as viable for use in immediate high-risk sites.

The Newcastle Herald reported last week that the state government had allocated less than half of its $72.6 million fund set up to address NSW coastal erosion.

Little more than $38 million has been handed out under the program, established in 2016 to help councils battle erosion.

Since 2016, City of Newcastle has spent $3.719 million on coastal projects approved under the grant scheme, of which $1.856 million has been provided by the state government.

The CMP also committed to a short term $4 million sand nourishment program to place 50,000 cubic metres of sand on the beach that has not taken place.

Council's spokeswoman said it was committed to "delivering the highest value for money proposition for sand placement".

The Newcastle Herald understands council is investigating the possibility of sourcing river sand.

"Currently investigations are underway for opportunistic sand sourcing that would ideally provide greater sand volume and lower social impacts than DPIE's [NSW Department of Planning, Industry and Environment] suggestion of trucking sand from local terrestrial sources which has an extremely high financial cost and impacts on the community," council's spokeswoman said.

According to City of Newcastle, it has invested more than $10 million combatting erosion at Stockton and its 2021-22 budget allocates a further $7.775 million towards immediate risk and ongoing management.

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