The Salvation Army at Hamilton, along with Mayfield-based Christian organisation Youth With a Mission, were successful in their applications to take over three of The Loft's programs.

Newcastle council estimates the closure of The Loft will save it more than $580,000 a year.

It was one of the first cuts made this year by the council to claw back a $29 million budget deficit.

Only three youth programs will be retained by the council: the youth council, youth week and an Aboriginal youth arts program, which is externally funded.

Two organisations put up their hand to support the youth group Come as You Are, while more than a dozen other programs have been cut completely.

Mayfield-based Christian organisation Youth With a Mission is now in control of the all-ages gigs resources, worth $27,229.

It was the only group that applied to take over the program.

The Salvation Army's Oasis Hunter was successful in securing the hip-hop music and dance program worth $22,308, beating just one other applicant.

The Salvation Army youth worker James Cameron said he was sad to see The Loft go, but was grateful for the equipment for its recording studio.

He said youth aged between 12 and 25 often used The Salvation Army's studio to vent their feelings and emotions, and that gaining access to new resources would allow them to be more creative and experimental.