The decision to appoint UrbanGrowth NSW to redevelop 80 hectares of prized public real estate around Balmain, Rozelle, Annandale, Lilyfield and Pyrmont – a site four times the size of Barangaroo – has raised fears that a push for private sector investment will override community views and lead to gross over-development.

But developer groups have welcomed the plan for the ''bays precinct'', which spans 5.5 kilometres of inner harbour frontage, saying ambitious building heights and densities are vital.

Premier Mike Baird announced on Thursday that the foreshore, which is two kilometres west of central Sydney, will be turned over to housing, retail, tourism, commercial and recreational use, as well as retaining some maritime activities.

The plan – the biggest urban renewal in NSW since the Sydney Olympics – incorporates Blackwattle Bay, the Sydney Fish Markets, Rozelle Bay and the disused, heritage-listed White Bay power station.

Mr Baird described the proposal as ''possibly the most exciting and ambitious urban renewal … opportunity in the world today'', which would lead to ''a great outcome for the people of Sydney''.

The government will hold an ''international summit'' in November, coinciding with the G20 in Brisbane, to hear from experts on the best way to transform what it calls an ''urban wasteland''.

The project will be led by UrbanGrowth NSW, which was set up to ''address the barriers to private sector investment in development projects in NSW''.

The future of the bays precinct has been highly contested as developers, commercial interests, maritime operators and the public all eye off uses for the bays, which include 94 hectares of harbour waters.

The area contains some of the last vestiges of the harbour's maritime and industrial past; however, much of the land is derelict and underused.

Most agree a long-term plan for the precinct was needed. But there have long been fears that community access would be denied and history would be wiped out by up-market development if the government gives priority to private interests to maximise return on the land.

A major government-run review into the bays precinct in 2012 concluded that ''publicly owned foreshore lands and harbour waters [should] be retained in public ownership''.

Greens MP Jamie Parker said choosing UrbanGrowth NSW to lead the project raised concerns that ''the main use for this precious public land will end up being to deliver developer profits rather than public benefit''.

He called on the government to commit to keeping the land in public hands.

A spokesman for Planning Minister Pru Goward said it was ''too early'' to make such a pledge.

Leichhardt mayor Darcy Byrne said the government risked repeating ''the mistakes'' of Barangaroo and its ''closed doors'' planning process.

Urban Taskforce chief executive Chris Johnson applauded the government for “taking a big-picture look at this whole area”.

Mr Johnson said medium- and high-rise development, including apartments and office buildings, was required, adding ''because it's so big and iconic in terms of location, it does need something special''.

He warned of community opposition and said ''to end up with something fairly mild to keep everyone happy would be a real pity''.

Urban Development Institute of Australia NSW chief executive Stephen Albin said the land had been dormant for too long.

''According to population projections, Sydney is tipped to continue to grow at a rapid rate,'' he said. ''Rolling out an urban renewal project of this size, with significant residential capacity, is vital to help cater to that growth.''

A City of Sydney representative said the renewal should involve ''an open conversation with experts, government and the community to find the right balance of needs for our global city''.

The government has identified land for reuse around Blackwattle Bay and Wentworth Park, which could include a redevelopment of the fish market, and a ''revitalised fresh food marketplace''.

Around Rozelle Bay and the Rozelle rail yards it has flagged a residential village, and relocation of maritime activities. It is unclear where they would be moved to.

White Bay and Glebe Island would be devoted to port use and the power station could become a "cultural landmark''.

Search for a future

November 1997 – The state Labor government officially creates the “bays precinct”. It reserves the foreshore land around Glebe, Lilyfield and Rozelle for port-related and recreational uses to preserve the inner harbour as a working and lively waterway. It says new apartments and hotels will be banned.

February 2008 – The Walt Disney Company eyes off the redevelopment of White Bay to expand its global empire of theme parks and resorts. It held discussions with the government, but nothing came of the plan.

February 2011 – The state Labor government approves a controversial new cruise ship terminal at White Bay, saying it must be moved from Barangaroo to make way for redevelopment. It opens in April 2013.

June 2011 – Sydney Fish Market tenants veto a proposed $50 million redevelopment including a park and promenade, part-funded by the state government. It marks the latest in a long-running saga involving the site's refurbishment.

October 2012 – The Urban Taskforce releases plans by three architects to revitalise the "lazy assets" of Glebe Island and White Bay. It wants the area turned into a new waterfront residential and commercial precinct, with towers 20 and even 60 storeys high.

January 2013 – City of Sydney suggests the White Bay power station could be turned into film studios or a university campus, and says the huge turbine hall is ripe for conversion into an art gallery or museum.

March 2013 – Leichhardt Council says one-quarter of the bays precinct should be dedicated to community use, and even the rooftops of new developments should be considered for open space.

December 2013 – The Panthers Group proposes selling off the greyhound racetrack at Wentworth Park for a billion-dollar residential development to fund two new sporting arenas in western Sydney. The state government rules it out.

July 2014 – The Coalition government announces the bays precinct will be opened to developers as it pursues the state's largest urban renewal program since the Olympics. About 80 hectares of public land will be turned over to housing, retail, tourism, commercial and recreational use, as well as retaining some maritime activity.