The museum, which will be funded by developer contributions, has been proposed for Cameron Park Plaza and will replace library services at Edgeworth.

Construction is expected to start later this year, pending approvals, with the aim of having the space open late next year. Edgeworth library will remain open until then.

As well as providing library services, the proposed facility will feature a museum collection showcasing the history of West Wallsend and north west Lake Macquarie, with the opportunity to attract touring exhibitions.

Lake Macquarie Mayor Cr Kay Fraser said she was excited to see another step toward the Hunter Valley's first converged library and museum building.

"One of my favourite features of the design is the landscaping, which includes heritage items including mining artefacts to help showcase the history of the Sugar Valley area," she said.

Council's Manager Arts, Culture and Tourism Jacqui Hemsley said the facility would "deliver new experiences and services for residents living in North West Lake Macquarie".

"The Sugar Valley Library Museum will be the perfect example of a modern library, providing cutting-edge technology, creativity, storytelling and immersion," she said. "As a museum, the building will tell the stories, struggles, strengths and life of north west Lake Macquarie through collection, video, photography and oral histories."