The decision, which would pave the way for Warrigal to build an aged-care hub at Corrimal and Beach streets, has been taken out of Wollongong City Council's hands after councillors voted last year to knock back the aged-care provider's rezoning plan.

Councillors agreed there was insufficient justification to support the rezoning, instead saying a "South Wollongong precinct study" should be prioritised in the council's annual plan and budget for next year.

Now, the state planning department has ruled that the Southern Joint Regional Planning Panel (JRPP) should make the decision, as it would be "unreasonable" to require Warrigal to wait longer.

Warrigal hopes to increase height limits up to 24 metres and allow larger floor space ratios for all land bordered by Corrimal, Swan, Kembla and Glebe streets, effectively creating a high-density entranceway at the city's southern limits.

The aged care group has been trying to build a two-tower high-rise block for the past eight years and has been knocked back several times.

It has approval from the Land and Environment Court to build a three-storey 120-bed high-dependency unit, but says the six-storey serviced apartment complex is necessary to make this facility financially viable.

In an assessment letter, NSW Planning's southern region general manager Brett Whitworth said the department had consistently supported the multi-storey seniors living development and agreed the planning controls to the south of the CBD were in need of review.

"In 2012, the director-general wrote to council identifying the potential economic and social benefits of the proposed Warrigal Care facility and asked council to expedite the review of planning controls," he said. "For various reasons this has not occurred and it appears unreasonable to require the landowner/s to wait indefinitely, particularly when the proponent appears motivated to undertake necessary studies and appears to be committed to completing the development."