New electronic signs will be installed on the approaches to the Adamstown railway crossing to advise motorists when the gates are due to close so they can avoid the notorious bottleneck.
The advance warning system will let drivers know when a slow-moving freight train is approaching.
"The upgrades to traffic signals made last year have seen safety greatly improve at the intersection, with a significant decrease in accidents and their severity," Newcastle MP Tim Crakanthorp said.
The new electronic signs will help motorists to avoid being stuck at the gates for up to 20 minutes and choose alternative routes along Park Avenue or Lambton Road.
"This is a simple upgrade that will save time for motorists, and provide a sense of certainty as they approach the gates," Mr Crakanthorp said.
Local businessman Luke Tilse proposed the digital alert system on social media earlier this week.
"They do it in car parks to show when cars are randomly going in and out," he said.
"They know what time the trains are going back and forth...You could have a timetable set up for the day when you know the gates are going to be shut. Why can't we know that information?
Transport Minister John Graham did not appear to be aware of the announcement when he spoke on ABC radio on Wednesday.
Mr Graham described Mr Tilse's suggestion as "an interesting idea about giving people some more predictability."
"Certainly happy to have a think about that innovative suggestion along the way."
Mr Crakanthorp explained that he had been working on the plan with the Roads and Regional Transport Minister Jenny Aitchison's office for some time.
"This has been in the works for some time and I received a briefing as recently as Tuesday on this issue," he said.
While it is hoped the new signs will alleviate some of the congestion in the area, an underpass or construction of the Lower Hunter Freight bypass are considered the only long-term solutions to the problem.
Constructing a tunnel would require the acquisition of a significant amount of private property near the crossing and cost hundreds of millions of dollars.
But as much as the Lower Hunter freight bypass between Fassifern and Hexham is promoted as the preferred solution, the project remains in the early planning stages.
It is unlikely the freight bypass will be built within the next two decades at the current rate of progress.
Mr Graham said Transport for NSW had done consultation and early work on the project.
"One of the things we are doing in the state budget is shifting money out of where it's been, that's been in the Sydney metros across to the heavy rail network," he said.
"That's necessary because so many people rely on it.
"In the Hunter, in Newcastle it's the heavy rail network that people rely on, and that's why we're shifting from simply spending money on the metro lines back into the heavy rail system."
Mr Tilse compared the predicament facing motorists at the Adamstown gates to playing the poker machines.
"You put your money in and you're invested," he said.
"You think 'surely I'm going to hit the feature in a moment and the gates are going to open' so you put another $50 in and you wait another three minutes and then you put more money in.
"You're so invested, you know you have got to hit this feature soon. You know it's going to be 20 minutes going around Kotara, you leave and someone else gets the feature."
