Port Stephens Council approached school students and held community workshops to come up with a design for the Raymond Terrace park, after it was identified as an under-used community resource.

"It is a great opportunity to do something special in Raymond Terrace," council's facilities and services manager Jason Linnane said.

The plans include a trail circumnavigating the park's "active spaces", which will be dotted with fitness equipment. There is a proposed skate park, a boardwalk, croquet courts, a multi-purpose event space, picnic shelters, barbecues and space for a community garden.

A $600,000 development application has been lodged for the Raymond Terrace Men's Shed inside the park and, according to Mr Linnane, installation of a $200,000 playground will start in August or September.

The overall cost is estimated at $4 million, but where the council gets the money from is yet to be decided.

Three areas on the plans have been identified for possible rezoning for residential use. One site borders Kangaroo Street and the others are on Elizabeth Avenue.

Port Stephens Council is investigating using these sites for seniors housing but Mr Linanne said these plans are still in the early stages with the council unsure if they want to sell, lease or develop the land.

The exhibition runs until July 16. The plans are on public display at the council's administration building in Raymond Terrace, at all Port Stephens Libraries and on portstephens.nsw.gov.au/