Port Stephens Council at its last meeting approved the rezoning from public recreation to low density residential of a block of land in Lyndel Close.

According to the council's own natural resources team, the Lyndel Close site was populated with koala food trees and was being used by koalas.

The council's report stated that "the removal of trees on the site would contribute to the incremental indirect long term impact on the koalas" and that "may result in increased stress for the koalas that include the site as part of their home range".

Simone Aurino, from the Hunter Koala Preservation Society, said she counted no less than seven food trees and had strong evidence, including claw marks on tree trunks and fresh droppings, of the koalas' existence.

"This is a great shame, not only because of the loss of valuable food trees but because it also means that koalas would have to move along the ground making them more susceptible to dog attacks and being hit by cars," Ms Aurino said.

"This council decision means our koalas will lose another safe haven."

Lyndel Close residents and koala carers Doug and Jane Wheen said they, like many in the neighbourhood, would be devastated to see the parkland go.

"The park actually has a name, Jacobsen Reserve, and has always been treated as such ... I can't imagine why the council would want to rezone the land," said Mr Wheen, who made a submission to the council outlining his objections to the rezoning.

He said koalas were a regular sight there.

Cr John Nell, normally an outspoken opponent of such applications, was happy to support the rezoning due to the small size of land which he described as "looking like someone's front yard".