Development in Arncliffe and Banksia will contribute up to $88 million for more parks, pedestrian and cycling facilities and road improvements over the next 20 years.
Minister for Planning and Public Spaces Rob Stokes said NSW Government's Bayside West Special Infrastructure Contribution (SIC) plan will help deliver important community facilities including a new park earmarked for Arncliffe.
"Public spaces are vital to building a thriving community and this new park will provide locals with a fantastic place to relax and play," Mr Stokes said.
"New and expanded cycleways and pedestrian paths will also create critical links to the Cooks River foreshore, Cahill Park and Tempe Reserve, and over the Princes Highway and Marsh Street.
"This funding will ensure the community reaps the benefits of new development through new and upgraded infrastructure and public spaces."
The Burrow Street site - currently being used as a WestConnex compound - will be turned into a park after the project is completed, with $25 million from the SIC plan committed to its development.
Bayside Council also received $10 million from the NSW Government to improve three public spaces as part of the Precinct Support Scheme.
The Bayside West SIC and Precinct Support Scheme align with the Bayside West Precincts 2036 Plan which will guide development in the precincts over the next two decades by creating a well-connected vibrant community with thousands of new homes, jobs and great public spaces.
"The Government's approach to precinct planning is about centring the planning system around people, places, public spaces and the environment in order to deliver great benefits for the people of NSW," Mr Stokes said.
