Sydney-based owners Robert and Mark Croft have proposed a $1.5 million renovation of the Watt Street premises.

The 105-year-old building was sold last year.

The St Philip's congregation is leasing the property while preparing to relocate.

A development application lodged with Newcastle City Council said the inner-city congregation had declined.

Its new focus on youth services and community outreach would be accommodated at a new church site.

The proposed development would involve some alterations, restoration and additions.

The application said the main church building would accommodate a dining room and bar so it could be used as a restaurant.

From time to time, the space would also host secular services such as weddings, baby namings, performances, memorials and conferences.

A new rooftop garden would provide space for alfresco dining and ceremonies, while a mezzanine would overlook the nave of the church.

The application said proposed operating hours were 7am to midnight, subject to demand and managerial discretion, with alcohol served from 10am.

Up to 23 staff would be employed when the centre was at full capacity.