While still in the early stages, the proposal for 16 Teramby Road, Nelson Bay would be a joint-venture between Fortuna Seafoods and Fisherman Wharf Seafoods.

Fortuna Seafoods owner Mike Rowley said he was working on changing a previous development application for the site to lodge with Port Stephens Council however, the council's spokeswoman said no changes had been received in writing yet.

Mr Rowley's plans for the site include converting the old factory into a retail seafood store with a takeaway bistro and open-air-alfresco dining area.

"People need a choice, in the mega store we will have more volume at lower prices," he said.

"It will appeal to a broad section of the community."

Mr Rowley said the building was ideal for the mega market as it already had existing freezers and coolrooms.

Originally it was used for exporting tuna and swordfish but after a decline in the export trade the building was converted for use as a wholesaler which closed about a year ago.

"It's use as an export facility is well and truly over," he said.

A temporary DA for a mobile food kitchen and customer dining was approved during the Christmas period but has since expired.