The council has agreed to push ahead to a gateway determination to raise the maximum height of buildings allowed at the northern end of Lake Macquarie Private Hospital.

Mayor Kay Fraser said it's a positive step towards securing a significant investment in the city.

"Lake Macquarie Private Hospital is a major employer in our city's healthcare sector," she said.

"This significant investment will allow the hospital to expand the services they offer and provide an even greater standard of care for their patients and our growing Lake Macquarie community."

The $120 million expansion will allow for three inpatient theatres, three day-surgery theatres, ten consultation rooms, 74 extra beds and more car parks.

With no other viable option for the development, the gateway determination will determine whether the building height can be raised from 10m to 37m.

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It had the unanimous support of councillors, and Cr Kate Warner said any investment in the region's health is a good thing.

"Particularly given the last two years we have seen and especially on this side of the lake in Lake Macquarie is a good thing, noting there will be significant consultation still to take place with the relevant agencies both in state government and the community," she said.

Others, like Cr Madeline Bishop, were hopeful it could be a step towards reducing congestion and long wait times.

"This will be a major improvement to our health services within the local government area and the wider region," she said.

"These proposed changes and expansion should improve patient outcomes to potentially impact positively on waiting times in the public and private health systems and hopefully bring more world-class health systems to our doorstep."

The draft planning proposal will go on exhibition for 28 days, subject to the outcome of the gateway determination.

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