More than 350 sand-filled fabric bags have been used to construct a foreshore protection structure at the old Milano's On The Lake site at Pelican.
The Department of Industry-funded works, which are considered a temporary solution for the site, are nearing completion after commencing late last year.
Part of the old Milano's On The Lake restaurant and event centre unexpectedly collapsed into Lake Macquarie in early 2016.
The popular building could not be saved and was leveled later that year.
A Department of Industry spokesperson told the Newcastle Herald the long-term use of the site was yet to be determined.
A land claim by Bahtabah Aboriginal Land Council on the site is still to be determined by the department three years after being made.
FLASHBACK: The day Milano's fell into Lake Macquarie | PHOTOS
"Stabilisation of the foreshore at the former Pelican Marina site is being completed by Soil Conservation Service on behalf of the Department of Industry," the spokesperson said.
"This work is being undertaken while longer-term management strategies are investigated.
"The department will work with council and engage with the local community before making any determination about the future of the site.
"Once the works are complete, the construction fencing will be removed and the site will be open to the public again."
Lake Macquarie City Council is undertaking planning for the future of the wider foreshore area.
"Council has been working to prepare concept designs and funding options for the broader area of the Pelican foreshore that is subject to a significant ongoing erosion issue, in partnership with the various stakeholders in the area," a council spokesperson said.
"Community consultation on these concept designs will be undertaken in the coming months."