The Newcastle 500 could return in 2024 but with NSW government support for next year only.
The contentious Supercars round, which split opinion in a recent council survey about whether it should continue, is understood to have gained the backing of Destination NSW, but the state agency has only offered to provide funding for 2024.
Newcastle has hosted the dual 250km races around the city's east end on four occasions since 2017.
They were held during that time under an agreement between Destination NSW, City of Newcastle and Supercars which concluded after this year's event in March.
The original deal included a potential five-year extension, which the three stakeholders have been negotiating on in recent months.
The financial support of Destination NSW is required for the event to go ahead in any capacity, but a one-year deal will require a new agreement between the three parties.
The Newcastle Herald has been told Destination NSW only wants to give a green light for 2024, not a further four events.
Supercars has secured support on an annual basis from other state governments for some of its other events, including in Queensland and Western Australia.
Whether Destination NSW would reassess its support annually remains to be seen.
All three parties did not deny a one-year deal had been tabled in separate statements to the Herald.
"Productive discussions are currently underway between Supercars, Destination NSW, and City of Newcastle regarding the future of the Newcastle 500," a NSW government spokesperson said.
Supercars traditionally announces its annual calendar for the following year at the Bathurst 1000, which is held in early October, leaving about six weeks for the parties to come to an agreement.
Supercars is understood to have back-up options if a Newcastle event failed to eventuate in 2024.
"Discussions are ongoing and are progressing toward an official decision on the future of the Newcastle 500," a Supercars spokesman said.
A new, one-year deal would have to be approved by City of Newcastle's elected council.
"Discussions between Destination NSW, Supercars Australia and City of Newcastle regarding the five-year extension of the Newcastle 500 are ongoing," a council spokesperson said.
