Under a radical shake-up of the controversial assessment process, half of the state's 500 3A applications will be sent to the commission for determination.

A quarter will be sent to the relevant local councils and the remaining quarter, which have been on the books for more than two years, will lapse.

The changes mean Lake Macquarie City Council, rather than the Planning Minister, will determine a project such as the Catherine Hill Bay residential development.

The commission is likely to determine other projects, such as the Hunter gas pipeline.

Premier Barry O'Farrell said no new Part 3A applications for private residential, commercial, retail or coastal development projects would be accepted as from yesterday.

"The days of giving the planning minister sweeping powers to approve developments at the stroke of a pen with virtually no consultation with local communities are over," Mr O'Farrell said.

The changes will have significant implications for the 186 active Part 3A Hunter projects listed on the Department of Planning website.

They range from the $1.3 million Terminal 4 coal-loader project at Kooragang Island and multimillion-dollar mine expansion projects to suburban commercial and residential projects.

Details of the thresholds that will determine whether the Planning Assessment Commission or a local council decide a project are yet to be announced.

Hunter mayors cautiously welcomed the return of the their planning powers but were keen to hear more about how the new system would work.

"We are all supportive of greater transparency in the planning process," Singleton mayor Sue Moore said.

"What we need to know now is which projects will fall into which category."

She said some multimillion-dollar mining projects in the Singleton local government area would remain outside the capacity of the council to determine.

Lake Macquarie mayor Greg Piper also supported the return of local council planning powers but he acknowledged there was a place for a process to deal with projects of state significance such as mines and power stations.

"Lake Macquarie Council has demonstrated it is perfectly capable of assessing major projects," he said. "GPT's Charlestown Square development is an example of that."

Mr O'Farrell also announced a full review of the state's planning legislation, expected to take about 18 months.