City of Newcastle has lodged plans to expand the Tighes Hill dog pound after its contract with the RSPCA expired.
The council has submitted a development application to install purpose-designed shipping containers to house 12 dogs at the Elizabeth Street site.
"Due to the potential future relocation of these services to an alternate site, portable containers are being used to meet this need," the application says.
Council records show the RSPCA's two-year, $564,000 contract with City of Newcastle expired on June 29.
The council estimates the shipping-container kennels will cost $275,000 to install and operate for about three years.
"City of Newcastle have historically contracted its responsibilities under Part 7 of the Companion Animals Act to the RSCPA," the application says.
"As this contract has expired, City of Newcastle are now required to increase its number of internally managed kennels to meet its obligation under the act."
The application says the council has used the site, bounded by Elizabeth Street, Hannell Street and Throsby Creek, as a dog pound for 18 years.
The development application says the four shipping containers will replace existing kennels in a building on the site which are "no longer suitable and do not comply with relevant standards".
"It is intended to establish new kennels off-site, however, until this occurs the proposed development is required to allow for continued operation by Council," the application says.