Opposition spokesman for regional infrastructure and services Mick Veitch made the announcement in Dapto on Friday, flanked by Shellharbour MP Anna Watson and Labor's Kiama candidate, Glenn Kolomeitz.

A Labor government would invest $1.2 million a year for four years to re-establish the LIA, as an independent statutory body, from July 1, 2015.

"I fought hard to retain the Lake Illawarra Authority and I think it's a disgrace the way it's been treated," Mr Veitch said.

"The abolition of the Lake Illawarra Authority by this government has left that lake's future in serious doubt.

"We are today saying we will reinstate the Lake Illawarra Authority and we'll involve the community in how the lake is managed and operated into the future.

"The future of the lake is a critical part of the future of the Illawarra."

The annual funding would be taken from the NSW Trade and Investment budget allocation, as in previous years.

Also included in Labor's announcement was a $46 million allocation from the Illawarra Infrastructure Investment Fund (IIIF) to provide additional lanes at Fowlers Road and a new interchange at Emerson Road along the M1 Motorway.

New exit ramps would be built at Kanahooka Road.

Ms Watson said additional infrastructure would relieve traffic congestion and take vehicles away from the Dapto CBD.

"This is the fastest growing region in NSW - we need that road infrastructure here now," she said.

A "Home of Football" would be built at West Dapto through a $7.8 million IIIF injection, a move welcomed by Football South Coast chairman Eddy De Gabriele.

"We're the largest sport, but we've got no home, we've got no base and we're busting at every single ground throughout the whole of the Illawarra," Mr De Gabriele said.