Defence Housing Australia is poised to lodge a development application for a new 232-lot residential subdivision on the Stockton peninsula.
The agency wrote to nearby residents last week saying it would submit a development application soon to Port Stephens Council for a "vibrant and sustainable coastal community" on the former Fern Bay rifle range.
DHA applied successfully in 2017 to rezone the land to medium density with building heights up to five storeys, but its letter to residents says the proposed dwellings will be single- and two-storey houses.
About 45 per cent of the houses will be retained for Defence personnel and the rest sold to the public.
The 11-hectare subdivision will include a central park and walkways to nearby bushland and Stockton beach.
DHA also applied successfully in 2017 to have the former Fort Wallace site to the south of the disused Stockton Centre rezoned for housing.
The 32-hectare Fort Wallace site is in Newcastle local government area.
The two redevelopments could provide for a total of 400 dwellings.
DHA's letter to residents says it will build the rifle range project in four stages over three to four years.
The two DHA sites form part of the Fern Bay North Stockton Strategy, a planning document developed by Newcastle and Port Stephens councils.
The land-use strategy foreshadows the two DHA subdivisions immediately to the north and south of a proposed shopping and housing town centre on the Stockton Centre site.
The NSW government has not announced its plans for the Stockton Centre land.
The Newcastle Herald reported on May 19 that a developer was poised to lodge a development application for a new supermarket and neighbourhood shopping centre at Fullerton Cove.
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