Lycett was a convict and one of Australia's earliest colonial artists.

The painting, done about 1820, was labelled as "Aborigines spearing fish, others diving for crayfish; a party seated beside a fire cooking fish".

Newcastle environmentalist Dianna Mannigel believes the location is the Eleebana bluff at Rocky Point on Lake Macquarie.

She said the ranges in the background could be Munibung Hill or Mount Sugarloaf, depending on the angle.

The ranges in the painting appear similar to Munibung Hill, but these days houses obscure the view to the hill from the bluff.

The most recent scholarly investigation into the painting's location, published in a John McPhee book about Lycett in 2006, suggested it was "possibly looking south towards the Bar Beach, Merewether Beach area".

Other theories have the location as Redhead or Swansea Heads.

Ms Mannigel said a $2.1 million cycleway around the bluff, which Lake Macquarie City Council plans to build, should include signs recording the area's Aboriginal history.

Mr McPhee's book, Joseph Lycett Convict Artist, said the painting featured Aborigines spearing mullet and cooking mullet in a fire.

University of Newcastle archivist Gionni Di Gravio said Ms Mannigel's theory had "added a new dimension" to the Lycett painting.

"If this is an identification, you're really solving a bit of a mystery that has been around since 1820, since he painted it," Mr Di Gravio said.

"It's fantastic; it's like having an early photograph of something that was going on for thousands of years before we arrived," he said.

Bahtahbah Local Aboriginal Land Council chief executive Michael Green said the painting could be of the bluff at Eleebana.