Playmates Cottage Childcare Centre may soon have a new home after Dubbo City Council approved the sale of a lot on Moran Drive.
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The potential new site is located at the northern end of the street, diagonally opposite Dubbo Private Hospital.
Playmates is currently located on part of the Dubbo Hospital site and in January it was confirmed the childcare centre would have to relocate.
In a letter to council Playmates director Christine Castlehouse said the lot on Moran Drive was shortlisted as the most favourable site for relocation.
"We have been advised by [DCC commercial facilities manager] Simon Tratt that council would be willing to sell at market value of $180,000 and now we seek option to purchase the land once our funding is finalised," she wrote.
Dubbo councillor Tina Reynolds said moving Playmates would provide extra space to manoeuvre in and out of the hospital.
"Health should be our number one priority. If that means Playmates has to move than I believe it should," Cr Reynolds said.
"I believe this is a great outcome for both sides that they're going to look at purchasing this land to build a new modern facility.
"We've got to look at the positives out of this, that Playmates will end up in a new modern facility for our city and preferably be able to cater for more children as well."
Councillor Allan Smith said it was a reasonable outcome, but he would have liked the building to remain at the current site.
"I think the better outcome would be for the building to stay where it is... it's basically going to be a road," he said.
"The accommodation is going to be demolished and be part of the road and the breast screen unit is going to be demolished and become part of the road.
"But leaving all that aside, if that's what needs to happen, that's what needs to happen."
About 40 per cent of children who attend Playmates have a parent who works in the health industry at Dubbo.
Cr Smith said the new location was in the right precinct to cater for that statistic.
"It's very close to the hospital, it's very close to the private hospital, it's very close to the dental surgery, it's very close to the universities," he said.
"This would be a great outcome if they get the money first."
At the start of the month Playmates management committee chairman Jim Jane said any construction would be subject to a competitive tender process but they anticipated it would cost more than $1 million.
