The NSW government will allocate $6.7 million in Tuesday's budget to prepare a "final business case" over the next two years for the Broadmeadow sports and entertainment precinct.
Treasurer Dominic Perrottet said on Monday that the project would include up to 2600 homes and more than 30 hectares of upgraded public space.
He said Hunter Park could create more than 8000 direct and indirect jobs during a "possible 12-year construction phase".
Government agency Venues NSW said in January 2019 that it was completing a strategic business case for Broadmeadow and that the document was being reviewed before being "submitted for consideration by the NSW Government".
The government offered no more public updates on the project's progress until Planning Minister Rob Stokes revealed more details to a property industry lunch in Newcastle in December.
Mr Stokes told the crowd that more money was needed to finalise the business case.
The day before the lunch, the Newcastle Herald revealed the existence of a government video which included the Hunter Park name and a flyover animation of what the site could include.
The video showed a four-star hotel, the Knights' new centre of excellence, apartments, a new show parade ring, indoor entertainment centre, playing fields, multi-storey car park, shops and playground.
Mr Stokes said on Monday that Hunter Park could accommodate 6000 residents.
The Greater Newcastle Metropolitan Plan, published in 2018, proposed an extra 1500 dwellings for Broadmeadow, but the government now expects significantly more residential development on the site.
Mr Stokes also said Hunter Park could include "leisure, aquatic and entertainment facilities plus cycling and walking tracks".
Venues NSW chairman Tony Shepherd said on Monday that the new business case would "sharpen the focus" of past planning for the site, including the concept video.
"That precinct is one of our top priorities," he said.
The business plan from 2019 "needed work from a business point of view".
"You have to bring a laser-like focus to these things," Mr Shepherd said.
He said replacing the outdated Newcastle Entertainment Centre was a priority.
"I went out there for the last [Tim] Tszyu fight, and I thought, 'No, this is not good enough for Newcastle by far.'
"We need a much higher-quality, bigger-capacity entertainment centre more befitting a city of Newcastle's status."
He said selling Crown land to developers to fund aspects of the Broadmeadow plan, as the state has done at Honeysuckle, was "not beyond the realms of possibility", but such decisions were up to the government.
Mr Shepherd said moving Newcastle Harness Racing Club's track to Cessnock to free up land at Broadmeadow was a "good idea", but Venues NSW had no control over the club's operations.
Mr Perrottet said Hunter Park could "draw visitors from across the country to significant sporting and entertainment events".
Sport Minister Natalie Ward said the new funding would "explore how world-class sports facilities could underpin major urban renewal outcomes".
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