TAFE NSW's $7 million Tomaree Connected Learning Centre is expected to open late next year, after construction started this week.
Parliamentary Secretary for the Hunter Catherine Cusack visited Salamander Bay on Monday to turn the first sod on the facility.
"It's great to see progress being made on this new modern campus, which will significantly expand and enhance the educational opportunities available to local students," Ms Cusack said.
"Today is a great example of the NSW Government's commitment to supporting regional economies and ensuring local employers and industry have the pipeline of skilled workers they need.
"The brand new facility will be built alongside the new shopping precinct in close proximity to public transport, community amenities, local high schools and employers, by local business Collaborative Construction Solutions."
Premier Gladys Berejiklian announced in early 2019 a new TAFE NSW campus would be built in Nelson Bay, but this changed to a Connected Learning Centre (CLC), in Salamander Bay.
TAFE NSW has already built CLCs in 14 locations, including Scone and Singleton.
The centres use "digitally-enabled technologies, such as simulations and virtual reality experiences" to offer regional students access to a wider range of courses and practical training.
NSW Teacher's Federation's TAFE NSW Hunter representative Annette Bennett said CLCs are "great to augment what happens on a campus and so should be co-located with a campus, not to replace a campus or a college".
"If TAFE is going to have a presence somewhere, then open a full college."
TAFE NSW has a limited presence in the Tomaree Education Centre, which includes kindergarten, primary school, high school and tertiary study in one complex.
Port Stephens MP Kate Washington said this existing facility and Tomaree Community College could have benefited from the funding instead of the CLC.
"We don't know what courses it's going to deliver or how it's going to do it, but we do know it will be all online," she said.
Minister for Skills and Tertiary Education Geoff Lee said the CLC would tap into the network of campuses and work in partnership "with the existing TAFE NSW presence" to offer students more courses close to home.
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