Federal Paterson MP Meryl Swanson joined Cessnock MP Clayton Barr, Shadow Minister for Regional Services Stephen Jones, Cessnock mayor Bob Pynsent and councillor Darrin Gray to announce the investment on Thursday.

Ms Swanson said it was "really great to be able to deliver this".

"The community has been calling out for this since the Hunter Expressway was built and pressure was put on Main Road in Heddon-Greta," she said.

"We are delivering on that need. It is such a dangerous area. Every day there is a near miss or accident.

"A traffic survey showed that 300 people in a 24-hour period did an illegal U-turn."

The MP flagged the proposal when she was a candidate in the 2016 Federal Election with a promise of $300,000 towards a formal car park, however her party was not elected.

She said the car park and roundabout, to be constructed near the exit of the service centre at the corner of Main Road and Stanford Road, will address safety concerns and congestion on a road that services 15,000 to 20,000 vehicles per day.

Under the election promise, a federal Labor government would commit $2.5 million for the project and a state Labor government would also earmark an additional $2.5 million to cover the cost of the project.

Cessnock MP Clayton Barr said people were already using the space as an informal car park and this would make it safer. He said the space would hold 84 car parks.

Mr Barr also said the roundabout was a fortunate outcome of the car park proposal, which would fix the "design stupidity" that has led to people doing illegal turns out of the service station.

"It's going to take the pressure off the residents, and the big thing is the roundabout is going to allow people to turn in whatever direction they want legally and safely," Ms Swanson said.

"We want to encourage people to ride share and carpool. We are also putting in a bus stop, so that's going to encourage people to use public transport. There are a lot of positives."