Hamilton Bowling Club closed down in June last year after 118 years of service.

Newcastle council called for expressions of interest for the site, and propose to award a 20-year lease to Adamstown Preschool Services to run the Gregson Park Early Learning and Community Centre.

The facility will cater for up to 100 children and create up to 22 new jobs.

The new agreement takes in the same footprint as the bowling club's previous 100-year lease, which includes 6000 square metres of green space commonly frequented by Gregson Park goers.

Locals have voiced concerns over a private organisation taking over the land, and met with the site designers and local councillors in an open forum in council chambers last week.

Although a formal development application is yet to be submitted to Newcastle council, residents are angry they were not properly consulted about the plans.

Hamilton Baptist Church pastor Andrew Dodd argued that the park should "be left as open public space for the majority, not fenced off for private use by a minority".

Kylie Ryan, from Space Design Architecture, said the new design included a community garden, recycled public seating from the bowling club and a landscaped promenade, which will all be open to the public.

She said they were looking to "blur the lines between the park and the existing centre".

However, childcare laws require centres to have secure fences around the property.

Childcare centres are also required to provide car spaces on site.

Councillor Lisa Tierney called the situation "a mess" and queried council staff's decision not to exclude the green space from the new lease agreement in the first place.

A council spokesperson was adamant a similar lease to Hamilton Bowling Club "was suffice" to keep the south-west corner of Gregson Park as green space and open to the public and it would cost the council more money to draw up a new lease.

The spokesperson also said the state government could still approve the plans even if they did not meet the car parking requirements.