Of the $1.75 billion, $340 million is promised for a light rail system in Newcastle CBD.

But councillor Kay Fraser challenged the state government to hand over more of the money to the rest of the Hunter, specifically the Glendale interchange.

In a notice of motion put to her fellow councillors, Cr Fraser said Lake Macquarie deserved a slice of the trade-off as the Hunter's largest local government area.

"The port is a regional asset and as Lake Macquarie city is the population core; it is important for our residents to benefit from the lease," she said.

Cr Fraser referenced NSW Minister for Transport and Minister for the Hunter Gladys Berejiklian's Hunter Regional Transport Plan, which she said barely touched on the transport interchange.

The interchange is a two-stage, $60 million project that will connect Glendale and Cardiff with road links and a railway station.

The council has allocated $10 million to the project, while $15 million will come from the state government and $7 million from the federal government.

However, progress stalled in December when the federal government withdrew $1.2 million promised to the project by the previous government.

Cr Fraser said the transport interchange had been put on the "never never" list, leaving Lake Macquarie "floundering".

Following last month's council meeting, Lake Macquarie mayor Jodie Harrison wrote to Ms Berejiklian to invite her to the city to discuss the project.

The state government is due to release its next budget on June 17.