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A revamped multimillion-dollar plan to transform the waterfront between the Harbour Bridge and Barangaroo into an arts precinct has been given the green light and received the cautious support of the Sydney restaurant owner who had stopped it.

The $207 million development of the Walsh Bay Arts Precinct has received final planning approval paving the way for the refurbishment of performance, production and rehearsal spaces for the Sydney Theatre Company, Sydney Dance Company, Bangarra Dance Theatre, Australian Theatre for Young People, Gondwana Choir, Sydney Philharmonia Choir and The Song Company.

Artist's impression of how the Walsh Bay precinct will eventually look.

At Pier 2/3, the last remaining undeveloped wharf in Sydney will become the new home of the Australian Chamber Orchestra and Bell Shakespeare.

A large heritage commercial events/art space has been retained to host events such as Sydney Writers' Festival and Biennale of Sydney .

Following negotiations between government, arts bodies and commercial tenants, modifications have been made to accommodate concerns about outdoor performances, crowds and public transport needs.

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Original plans for the waterfront public square between Wharf 4/5 and Pier 2/3, with large steps leading down to the water, did not form part of the State Significant Development approvals announced by the Minister for Planning, Anthony Roberts.

Further design work is to be carried out on the precinct's public spaces with the development's commercial neighbours directly abutting the square expecting to be consulted on possible options for the square's use in coming weeks.

The Walsh Bay Arts Precinct development will refurbish performance, production and rehearsal spaces.

A condition of approval is that a public transport plan be developed for the precinct with the neighbours and chamber of commerce keen for ferries to stop at Pier 2 at peak times.

Bell Shakespeare's general manager, Gill Perkins, said the new precinct represented a wonderful opportunity for all arts companies. ''Together we can support future generations of artists and arts workers, sharing our resources and supporting a buoyant future."

Brigid Kennedy, head of the Walsh Bay Arts Chamber of Commerce, said more work needed to be done but affected tenants had received a personal commitment from Arts Minister, Don Harwin, that he would consult with them so they would not be disadvantaged.

Dance companies will be among the beneficiaries of the $207 million revamp of Walsh Bay.

Mr Harwin said the rejuvenation of Walsh Bay into a world-class arts precinct would contribute towards the growth of Sydney as internationally-renowned art and cultural destination.

The upgrade was put on ice last year when the NSW Court of Appeal ruled in favour of Ms Kennedy, the owner of the Simmer on the Bay restaurant at Walsh Bay, who had challenged the project on the ground that it had not been lawfully approved.

''It wasn't just for me it was for all of Walsh Bay including the arts tenants,'' Ms Kennedy said. ''We are at capacity in terms of transport here. When the Rosyln Packer Theatre opens out, it takes half an hour for crowds to disperse. The fear of all tenants was that people would come here, would not be able to get out, and not come again.

''When the precinct opens in two years' time, the Metro [light rail link] will still be another four years away.''

The redeveloped Walsh Bay is expected to open now in 2020, rather than 2019 as first anticipated. Arts bodies had agreed to try to open and close performances at different times so as to avoid pedestrian and traffic congestion, Ms Kennedy said, and a central administrator will be responsible for ensuring smooth precinct movements.

The Court of Appeal's decision ruled that the planning consent granted in 2015 that had underpinned the project was invalid, requiring a new planning and consultation process.

Now that has occurred, Ms Kennedy revealed Create NSW intended to lease out her premises as a site office for the project.

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Linda Morris

Linda Morris is an arts and books writer for The Sydney Morning Herald.

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