Lake Macquarie council has finalised the design for stage one of the project, which includes the Pennant Street bridge over the Main Northern Railway line to link Glendale and Cardiff.

To complete stage one, the council needs to acquire parts of Pennant Street and Nelson Road, which belong to Bendlink Pty Ltd.

The two parties have been in discussion since late 2013 with the aim of reaching a mutual agreement. The council offered Bendlink an undisclosed sum for the land, but the company rejected the offer.

Councillors voted unanimously last week to pursue compulsory acquisition after approval from the NSW Minister for Local Government if the matter cannot be settled within 30 days. A council report said "approval for an alternate, albeit compulsory, acquisition is prudent".

"The LMTI project may delay indefinitely or be unaffordable if no alternate acquisition option is available," the report said.

Lake Macquarie mayor Jodie Harrison said the council must take this route due to "timing issues in the acquitting of grants".

The transport interchange will cost $60 million. The council has allocated $10 million, while $15 million will come from the state government and $7 million from the federal government. However, the federal and state grants will expire by mid-2015 if they are not used.