MidCoast Council has reclassified a lot within a subdivision on Diamond Beach Road, Diamond Beach as 'community' land instead of 'operational' land following strong support from locals and developer Edgewater Shores.

The lot is home to a large fig tree that holds great significance to the community while the land has been used abundantly over the years, in particular from neighbouring Hallidays Point Public School.

The decision will allow for an exclusion zone, adjacent to an ongoing development from Edgewater Shores, to ensure the tree won't be removed at a later date.

Under the Local Government Act 1993, the reclassification would be certified once the land was dedicated to council by the developer. If the lot was to remain operational, the land could be exchanged or sold, effectively leaving the status of the tree in the balance.

Stated in a report released before the meeting, council was aware the area is frequently used as a recreational space, as evidenced by tree swings that hang from a large branch.

The land classification change was debated and decided at the February 27 ordinary meeting of council.

Hallidays Point Community Liaison Progress Association committee member Ray Piper addressed councillors at the meeting. He urged them to show "good will" and preserve the tree and land.

Edgewater Shores has indicated it would assist a landscaping project and installation of benches and a picnic table.

In addressing the meeting, the company's Joe Coco said they had consulted with the community about the space and didn't want to put the tree at risk.

Cr David Keegan said it was a "generous offer" from the developer to preserve the site and he respected the community's sentiments that the tree needed to be protected. Cr Claire Pontin disclosed members of the community had offered to help with ongoing maintenance of the site.

Cr Karen Hutchinson questioned if potential rezoning of the land would be affected if the name changed but was reassured by council's acting director of planning and natural systems Paul De Szell that reclassification to 'community' would only mean council would need to complete a plan of management for the site.

Mr De Szell said the cost of the plan would be "insignificant".

Cr Len Roberts said the decision was putting the wishes of the community first.

"The tree holds great significance to the community and it needs to be protected," Cr Roberts said.

"The community would grieve if it was lost."