A mother with two children at Warilla Child Care Centre has described the decision to delay deciding the future of the facility as a "glimmer of hope".
At Tuesday night's Shellharbour City Council meeting, a recommendation was put forward that the long day care facility be closed at the end of the year if a new service provider could not be found by October.
The suggestion came after Housing NSW informed council the rent on the property would increase from $1 to $40,000 a year.
But after addresses from 11 speakers, who shared their concerns about the potential closure, Cr Kellie Marsh moved to delay the decision until September 2.
The motion was carried unanimously, with council to investigate other options and consult parents.
Marisa Wheatley, who has a son and daughter at the centre, said the extra time would give families a chance to brainstorm a plan of action. Parents had been distressed they were told of the pending decision only the Friday before the council meeting.
"It gives us a little bit more time to rally together as parents and members of the community so we can try and get an outcome that's more suitable for the kids and the centre," she said.
"I'm happy no negative decision was reached. There's a glimmer of hope, but there's still no definite outcome, and we will have to rally together."
Allana Cuzen, whose two sons go to the centre, said she was pleased the council would spend more time considering the options, but flagged concerns the nine-week consultation period might make it difficult to put alternatives in place before the end of the year.
"Ideally [the parents] would prefer council to still run and manage the centre, but if that's not the case, to have a suitable provider take it over with the same kind of conditions, such as opening times."
Cr Marsh said the council should have consulted parents about the centre's future before a recommendation was put forward.
She said many families, including those who fostered children, those from an indigenous background and single parents, would be left with no other childcare options if the centre was to close.