LAKE Macquarie North Ward councillor Brian Adamthwaite said the planned land transfer at Teralba was an example of striking the right balance between development and conservation.
On Monday night councillors unanimously passed a planning agreement which paves the way for a new 181-lot housing subdivision to be developed on 11.4 hectares of privately-owned green space in Edgeworth.
This development will be offset by council acquiring 10.7 hectares of green space at Teralba that would form part of an expanded conservation zone.
"At the same time that there's the provision for people to have homes, in another part of the city, there is a provision for wildlife to continue to have their homes, which is great," Cr Adamthwaite said.
"I quite like the concept that we look at ourselves as a city, rather than being parochial.
"North Ward is providing housing for people and West Ward is now getting attractive land that's going to maintain, not only wildlife homes, but it'll be a recreational facility for people all over the city."
The 11.4 hectares at Edgeworth, known colloquially as the "Transfield Estate", is encircled by housing and is bordered by Minmi Road, Transfield Avenue and Tarkalong Street and is owned by Twin Rivers Development.
The land Twin Rivers Development is transferring to council ownership under the planning agreement is bordered by Caravel Street, Fishermans Drive and Bowline Street in the Billy's Lookout Estate in Teralba.
Under the planning agreement Twin Rivers Development must also pay council a $761,000 endowment.
Twin Rivers Development must transfer the conservation land to council ownership within two years of development consent being granted for the residential subdivision at Edgeworth.
Once acquired, it would create a 18.6-hectare native vegetation corridor at Teralba that is home to threatened species such as the powerful owl, the little bentwing bat and the black-eyed Susan plant.
"It's maximising an area by joining bits together," Cr Adamthwaite said.
"In Lake Macquarie there are a number of areas that have grown over time from developer contributions and environmental offsets so we can hold them together."
Unlocking new areas for residential developments has been a major issue for both Lake Macquarie and City of Newcastle councils along their western fringes as they struggle with the demand for more housing.
Last week developer Winten Property lodged modification plans with Lake Macquarie Council for its residential project at 140 Minmi Road, taking its total number of proposed homes to 664.
The development has been marred by council and community concerns surrounding environmental degradation.
Last year a Lake Macquarie Council flora and fauna report found the development would negatively impact biodiversity and wipe out 150 hectares of core koala habitat.