Mr Lee and Mr Piper moved to assure residents there would be consultation before and after any plans are lodged with council.
Mr Lee said it was "a bit early" to commit to a timeline for the project, but Mr Piper said concept plans would likely be drafted by the end of this year and the centre, if approved, built in the first half of 2023.
Mr Piper said it was "not intended" that Myuna Bay Water Ski Club would have a presence at the future centre. He said negotiations to allow the club to use Whiteheads Lagoon adjacent to the old site "were continuing".
He said the old centre would remain in public hands and it was important for that site to be "properly managed and rehabilitated".
"My preference is that the site be added to Lake Macquarie State Recreation Area and managed by National Parks and Wildlife Service," he said.
Lake Macquarie mayor Kay Fraser wants the government to "fast-track the planning and construction of the new facility" but said residents needed to be consulted before that could occur.
The Myuna Bay centre closed in March last year due to risks associated with the stability of the power station's nearby ash dam.
Greg Piper has been an independent voice for the people of Lake Macquarie for more than 30 years, as a Member of Parliament, Mayor and councillor. He was elected to Lake Macquarie council in 1991, served as Mayor from 2004 until 2012 and has been the State MP for Lake Macquarie since 2007.