Ground breaks on City of Newcastle council-supported Astra Aerolab precinct in Williamtown

Newcastle Airport has signed an agreement with defence contractor BAE Systems Australia to lease land at the site of a planned high-tech air hub that is anticipated to deliver 5500 jobs to the Hunter region.

NSW deputy premier John Barilaro forewent the traditional shovel and instead used an excavator to turn the first sod at the aerolab site, near the Williamtown airport, last Tuesday.

Mr Barilaro, also the Minister for Regional NSW, Industry and Trade, said he was proud to see the $11.7 million grant he signed off on last year to begin development of Astra Aerolab "start to be realised".

"The infrastructure we have funded will allow aviation companies to quickly establish themselves within the precinct and get on with the job of supporting RAAF combat aircraft, including the F-35A JSF," he said.

"By funding the Astra Aerolab precinct, we are helping to create jobs for aerospace engineers, aviation, IT and avionics specialists and attracting workers to the Hunter region."

Newcastle Airport acquired 76 hectares for the Astra Aerolab Business Technology Park - which will specialise in aviation and aerospace-related manufacturing, maintenance and research projects - in January.

The $19.66 million facility, which will adjoin Newcastle Airport and RAAF Base Williamtown, will include on-site cafes, parks and cycleways and certain lots will have air-side access.

The project will be funded by the NSW Government, City of Newcastle and Port Stephens Council.

Newcastle Lord Mayor Nuatali Nelmes hailed the sod turning of the new defence, aerospace and technology hub as a sign of the "great economic diversification to come on the march to Newcastle's Smart City status".

"[It] promises a bright new era of jobs-led economic growth for the region," Cr Nelmes said.

"When complete, the hub will create up to 5500 local highly skilled jobs in defence tech, smart manufacturing and service delivery, to help support our growing population and ensure our sustained prosperity. "

The sod turning coincided with Newcastle Airport chief Dr Peter Cock signing an agreement with Defence contractor BAE Systems Australia to lease land within the 76-hectare areolab precinct.

Dr Cock said the agreement signified an exciting milestone for Astra Aerolab.

"BAE Systems Australia is the nation's largest defence and security company, so the importance of this signing cannot be overestimated. BAE's presence will not only attract further jobs and investment, but help ensure we develop the world-class defence and aerospace precinct that our region deserves," he said.

Andrew Gresham, a BAE managing director, said Tuesday's milestone was "incredibly important for our business" and would "facilitate the redevelopment of our existing Williamtown site ahead of our work supporting the F-35 JSF".

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