Transport for NSW is investigating whether to rezone land on Dudley Road, Whitebridge, for housing after completing remediation works on the site.
The 8000-square metre block on the south side of Dudley Road, next to the Whitebridge shops, is surplus to TfNSW requirements after the government abandoned plans for a bypass east of the Pacific Highway.
The nearby Fettlers Whitebridge redevelopment is also on land once reserved for the road corridor.
A TfNSW spokesperson said on Thursday that the department was "currently investigating the potential" for rezoning the vacant land from its existing environmental conservation classification to residential.
"A rezoning application for this land has not been lodged with Lake Macquarie City Council at this stage," the spokesperson said.
TfNSW proposes to sell the land pending the outcome of its investigations.
"As this land is no longer required for operational purposes, Transport for NSW would offer the land for sale on the open market," the spokesperson said.
"Transport is not in a position to comment on any future development of the land by the new owner."
The state government announced last week that all new residential development on crown land would have to contain at least 30 per cent social or affordable housing.
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