The development plan for the Dales Road project - which is expected to employ up to 40 staff - will help address the backlog of 300 children on the city's waiting list.

Cr Debbie Arnott said waiting lists for places had grown "astronomically" over the past few years and anything that could help alleviate that problem was good.

She said that although the 16 units were sited on smaller blocks than allowed for under the structure plan for the area, they were still only classed as medium density.

"This development is a major plus for our community," she said.

"It ticks a lot of boxes for us as a community. In such a fast growing area we need to accept as much help as we can."

Cr Ben Blain said as the city's population grows out the Aberline Road area, the demand for childcare services was only expected to grow.

"This is going to be an important service for those that do live out there," he said.

More housing stock was critical in order for the city to grow and prosper, Cr Blain said.

He said it was also good to see there was more social housing included in the proposal.

"Every little bit helps to give someone a home that doesn't have a home now," he said.

Half the land would be used for 15 townhouses along with one single detached two-storey townhouse designated as affordable housing.

Cr Angie Paspaliaris said if council could facilitate addressing the demonstrated need for childcare and early learning facilities, it could only be a good thing.

However, Cr Paspaliaris said she had concerns about the residential aspect of the development plan.

She said the structure plan had a target of 15 dwelling per hectare but the proposal would equate to more than double that amount. "I am also sceptical of only one out of 16 dwellings being proposed as affordable housing," she said.

Cr Paspaliaris also raised concerns about the lack of open space in the residential part of the plan but acknowledged a future planing application for the townhouses would allow them to consider the proposal further.

Cr Richard Ziegeler said the childcare centre was "desperately needed" and "most welcome". But he also aired reservations about the residential component of the development plan.

"It's too many dwellings in that particular space," he said. "It's a bit of a trade-off actually. I think that we're having to trade off one desirable aspect against an undesirable aspect.

"I bemoan the fact that there's not more open space in this particular development."

Cr Otha Akoch said Warrnambool was in desperate need of child care services.

The DNAA Group spokesperson earlier this year said they were working very hard to open the centre by early 2024.

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