The NSW Supreme Court will consider on Friday whether this year's Newcastle Harbour Blockade should be declared illegal.
NSW Police Commissioner Karen Webb launched legal action against the event's organisers, Rising Tide, earlier this week.
It is the first time the event has faced such a challenge over 12 previous protests.
Rising Tide organisers are seeking legal protection for a 50-hour flotilla blockade of the shipping channel and a festival on Horseshoe Beach featuring 30 live music acts between November 19 to 28.
It is anticipated that 10,000 participants from across the country will attend to support Rising Tide's call for an end to new coal and gas approvals, and the imposition of a 78 per cent tax on coal and gas exports to fund the energy transition.
About 1500 protesters took part in last year's 30 hour blockade.
Organisers claimed the event stopped as many as eight ships carrying up to half a million tonnes of coal leaving the port.
More than 100 people who were arrested after they refused to leave the water when the protest permit expired.
This year's event has attracted artists including Midnight Oil's Peter Garrett, John Butler and First Nations rapper Dobby. But it has also resulted in the cruise liner cruise ship Silver Nova scrapping plans to visit the port November 24.
"The People's Blockade is a family-friendly, peaceful protest that has a proud tradition in Newcastle, and has taken place 12 times in the past," Rising Tide organiser Zack Schofield said.
"We stand by our comprehensive risk management plan and will welcome a Greenpeace Australia Pacific safety boat team to Newcastle to help manage water safety.
"Regardless of this legal challenge by police, it will always be completely lawful to assemble on a public beach and parklands and to kayak on Newcastle harbour. Now more than ever we need to exercise our democratic right to protest, so we hope to see thousands of people join us at the People's Blockade."
Speaking in Newcastle on Tuesday, Premier Chris Minns said the blockade would damage the state's economy and its ability to transition to a clean energy economy.
"I don't want to be antagonistic about it, other than to say that if you block that port and put obstacles in the way of industry, it prevents and hurts our ability to transition the economy to get the kind of revenue we need to invest in vocational centers like this one (Tafe Centre of Excellence) and to ensure that the economy is better tomorrow," he said.
"At the end of the day, my responsibility is still to the NSW economy and ensuring that the Hunter in Newcastle have a future.
"The state's biggest export as of today is still coal. I know people don't like saying that. They don't like hearing it, but that's the truth and until we get other industries up and running and pumping in the Hunter that is going to be a key source of revenue to transition that economy, and I'm not switching it off tomorrow."
Greens MP and spokesperson for climate change and justice Sue Higginson described the NSW Police Supreme Court appeal as an "expensive, unnecessary and retrograde step."
"It sends a very dangerous message to the people of NSW who care about the right to protest and those who want the Government to do more about climate change," she said.
"Rising Tide have been steadfast in their responsibilities around organising this iconic climate protest event. They have approached the police in good faith seeking to work with them to ensure the event is safe and orderly and not only have they been let down they are now at the other end of a legal case. When the state fights the people in this way it says that something is very wrong with the administration of our democracy."
Senior Lecturer at the University of Sydney' law school Dr Louise Boon-Kuo said it was concerning that the NSW Police Commissioner had sought a Supreme Court order to prohibit Rising Tide's planned protest.
"It is important to remember that a prohibition order does not make a protest illegal. The freedom of assembly and protest is a key way that people can participate in political debates," she said.
