The university officially called yesterday for expressions of interest to develop a $4 million block of land donated by the State Government at Honeysuckle.

The 4100-square-metre site in the commercial precinct is to house about 2500 students from the university's business faculty, both undergraduate and postgraduate.

The new building would be up to 30 metres high, similar to its neighbours and provide 18,000 square metres of teaching space.

University Vice-Chancellor Nick Saunders said it would free up University House in King Street to allow the law school to move into town, with some spill into potential new premises around a proposed legal precinct at Civic.

This would be followed by upgrades at the Conservatorium of Music to allow the entire creative arts school to relocate to the city centre.

The final stage would see the education and arts faculty move to yet-to-be-determined locations over the next 10 to 15 years. It would mean, in total, an extra 60,000 square metres of teaching space in town.

The university is finalising applications for Federal Government infrastructure funding but Professor Saunders said he hoped the national call for expressions of interest would identify potential private sector partners.

Proposals will be assessed by the university and Hunter Development Corporation, which manages Honeysuckle.

"We have got to be realistic: we need to raise the money to do this, we cannot fund all of this," he said.

Minister for the Hunter Jodi McKay rejected criticism that the project was not rejuvenating a rundown part of the city. She said it was the only site the Government owned.

"We have demonstrated we are serious about this and we expect [that] developers, and those owners of derelict buildings, will see it's time to look at this now and move forward."

Proposals must be submitted by April 30.