Port Stephens Council will lodge a formal request with the Minister for Local Government Paul Toole to consider a merger with Dungog.
The application under the Local Government Act asks that Mr Toole refer a merger with Dungog Shire Council, in part or whole, to the Boundaries Commission.
Clarence Town has already asked the government to consider making it part of Port Stephens.
Port Stephens' councillors supported the idea unanimously as a mayoral minute last Tuesday night as an alternative to a merger with Newcastle.
Last week Fairfax Media reported Cr John Nell said "I think this is our ticket out of jail".
“And in the long term it would safeguard Port Stephens against any further mergers,” he said.
Cr Johnston said this comment summed up what Port Stephens really thought about Dungog.
"They don't care about Dungog and our community, they are only looking after theirselves," he said. "They are just using us because they don't want to merge with Newcastle.
"It worries me what is going to happen as I just want the best for this community. Whether we stand alone, merger with Maitland or Port Stephens, we will still need a bucket of money to be spent in the Dungog Shire.
"Maitland and Port Stephens residents won't want to spend money in our shire so the state government will need to have a bucket of it to be used here."
The application, under section 218E and 218F, would require a survey of electors in Port Stephens and Dungog, through public meetings and postal surveys as two examples.
The application seeks to cut off the Dungog-Maitland merger option. It’s back on the table because Gloucester is now in discussions with Great Lakes and Taree.
Port Stephens councillors prefer for Port Stephens to stand alone but, if this is not allowed, they will press the case for Dungog.