Newcastle council has been awarded $500,000 to trial a 30km/h zone and streetscape activations on Darby Street.
The grant came from the latest round of the $20 million Streets as Shared Spaces program across NSW.
Two other Hunter councils were also successful in the NSW government grant program. Maitland council will receive $500,000 for a 'Maitlanes' project to unlock public space in seven laneways the city's CBD and $497,516 will go to Port Stephens council for its William Street Urban Park project to transform a currently inaccessible space into a new public area capable of hosting small events.
Parliamentary Secretary for the Hunter Taylor Martin said if the pilot projects gained widespread community support, the government would look to make them permanent.
The Streets as Shared Spaces 2 program stems from the pandemic with 70 per cent of people in a recent poll saying they were connecting with people in public spaces instead of at home.
Maitland mayor Philip Penfold said the program was hugely successful when it was run in Morpeth, with a lot of positive feedback from businesses and visitors.
Minister for Infrastructure, Cities and Active Transport Rob Stokes said communities were also demanding better walking and cycling infrastructure.
"Now is the time to capitalise on the increased appetite for open space and safe places to connect with our communities in a meaningful way," Mr Stokes said.
"We're reimagining our streets as better places for people, which will drive an increase in foot traffic, support businesses and bring the community together to enjoy the vibrancy our state has to offer."