In an announcement at the Port of Newcastle on Tuesday morning, Premier Mike Baird said that from 2018 large cruise ships would have a dedicated home in the city, the latest in a series of funding announcements that he said made Newcastle “the envy of the nation”.

On the same day that he announced a new V8 Supercar race in Newcastle from 2017, Mr Baird said the way to support “great cities” was through “jobs, events and tourism.”

“Over $13 million will be spent in creating a great cruise terminal that will encourage some of the greatest liners in the world to stop right here in the heart of Newcastle,” Mr Baird said.

“It will encourage some of the greatest liners around the world to stop right here in the heart of Newcastle.

“That’s a great thing because as those liners come in here you’ll have people who’ll use local cafes and restaurants, boosting the local economy.”

The announcement on Tuesday was attended by officials from cruise liner company P&O Cruises. Company President Sture Myrmell said the investment “reinforces the great reputation the people of Newcastle have earned”.

Mr Myrmell said the construction of a dedicated terminal would mean operators avoid the “really horrid conditions” that had sometimes greeted arrivals.

“If you have a couple of thousand people get off a ship … it takes time to get back on or off a ship, and you really want to do that under cover or in an environment that’s as comfortable as possible,” he said.

“If you’ve got rain or inclement weather, it’s really uncomfortable … It’s not a good look. 

“Having an asset like this will really encourage and support more ships coming into Newcastle, and that can only be good for the local economy.”

Port of Newcastle CEO Geoff Crowe said cruise shipping currently delivered about $11 million annually to the local economy and this cruise terminal would enable the port to attract more cruise ships.

“Purpose-built facilities will provide a professional welcome for passengers and will position Newcastle as a home port where ships can start and finish their destination in Newcastle,” Mr Crowe said.

The government funding will enable the construction of a purpose built terminal of about 3000 square metres, a dedicated car park, enhanced wharf infrastructure and improved accessibility for ship provisioning. 

Newcastle Labor MP Tim Crakanthorp, who was at the announcement, said he had advocated for the decision.

“As most Novocastrians are aware, I’ve been a supporter for a cruise ship terminal to be built in Newcastle,” he said.

“It is estimated that over 17,000 passengers are expected to have visited Newcastle on cruise ships in the 2015/16 season. 

“The investment in a terminal will be a massive boost to the cruise ships, industry, local tourism sector and a blessing to the local economy and help to continue to diversify the Port of Newcastle.”

Construction is expected to start in mid 2017 and finish in 2018.