A boarding house with 66 double bedrooms is proposed for the southern end of the Kirrawee shopping strip, opposite the train station.
The five-storey development at 165-171 Oak Road would include four ground-level shops and three basement levels for parking.
The site is occupied by old, two-storey buildings housing Howling Forest Cafe, The Running Company and a Thai gym.
A hundred metres away, on the other side of the road and railway bridge, is a site where a 50-room boarding house was proposed three years ago.
Following a community outcry about the area already being "overdeveloped" because of the brick pit development, Sutherland Shire Council bought the proposed boarding house site for about $3 million and is creating a park.
The proposed new project will cost $11.6 million to construct, the development application (DA) said.
The plans include 66 double boarding rooms, ground floor manager's room, common room, 42 vehicle spaces, 15 motor cycle spaces and 24 bicycle spaces.
The four shops will be allocated eight of the parking spaces.
"The proposal has been designed to transform the existing commercial land uses into an attractive and vibrant mixed use development, which creates an environment with a high degree of accessibility and usability," the DA said.
"The physical appearance of the built form will contribute to the streetscape and complement the adjoining developments both current and envisaged upon the redevelopment of aged building stock.
"The delivery of four retail tenancies and 66 boarding rooms within close proximity to employment opportunities, services and existing transport infrastructure will contribute to the residential targets of the strategic planning policies, whilst the implementation of environmental sustainability measures will also contribute to the overarching environmental objectives of the policies."