City Of Newcastle will call for ideas in the New Year to open the historic Shepherds Hill Cottage for community use in line with guidelines for the state heritage-listed structure and wider defence group site.
A café/kiosk, museum or art space are among potential uses for the former gunners' residence and mess hall, while the wider 4,500sqm site could one day host weddings, a film set or educational and entertainment programs.
Lord Mayor Nuatali Nelmes said Council would invite expressions of interest (EOI) to lease the cottage in February, with its internal restoration set to start upon completion of The Hill section of the Bathers Way shortly after Christmas.
"The Shepherds Hill Defence Group site sits on undoubtedly one of the most spectacular pieces of historic real estate in Newcastle, and is in a prime position on Council's Bathers Way coastal pathway," the Lord Mayor said.
"When this section of the work is completed shortly after Christmas, Shepherds Hill Cottage will become the new 'must-see' location, just as Merewether Surf House and the Bathers Way did when they opened to the public."
Council ICEO Jeremy Bath and Lord Mayor Nuatali Nelmes at Shepherds Hill Cottage ahead of its internal renovation..
Submissions made during the eight-week EOI process will have to conform with the conservation management plan now in the final stage of approval with the Office of Environment & Heritage (OEH).
Council officers will assess submissions against weighted criteria before Council identifies a preferred tenderer.
It is expected the cottage will be restored to its former heritage glory in the first quarter of 2019.
"The restoration is integral to delivering local amenity and the coastal revitalisation we embarked on eight years ago," the Lord Mayor added.
Damage to the cottage's interior.
Council's Interim CEO, Jeremy Bath, said the long wait for official approval to create something extraordinary out of the site had frustrated Council after the April 2015 Superstorm caused enormous damage to the Cottage.
"We are finally ready to start the restoration work," Mr Bath said.
"The wait for the required section 60 approval and excavation approval have now been delivered and I can assure the community Council's trade staff will move quickly to restore the cottage and ensure its future use enables it to be enjoyed by the broader community, both local and interstate.
"Our own builders will undertake all the work under the close supervision of a heritage architect and archaeologist.
"Such is the importance of this site, we will document its progress with regular updates to the community throughout 2018."
A tearoom, community arts centre and museum were among ideas suggested for the cottage during public consultation on the site's conservation management plan, which Council endorsed for submission to OEH late last year.
Feedback from the state's chief heritage agency was factored into the plan before its resubmission for final approval last month.
The cottage was originally a quarters for personnel who manned the adjacent eight-inch gun and later a mess hall for officers responsible for coastal defences.
The building, observation post and gun emplacement were originally designed to defend Newcastle's burgeoning coal port after an 1878 Royal Commission into Colonial Defences.
The military site served as an integral command position up to the end of World War Two uniquely occupied by the RAAF, Royal Navy and the Army.