Consultants have looked at options for the future, which included redeveloping the station on the existing site and moving it to another location in the town.
Loosing Hill Car Park has come out as the preferred site, following joint work between Tynedale Council, the Hexham Community Partnership and Northumberland County Council and its consultants.
Other possible sites that have been considered are Hexham Railway Station, Wentworth Car Park and a combination of on-street facilities at Priestpopple.
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Loosing Hill is the preferred option because it offers level access, is close to the main shopping area and can accommodate all modern requirements.
As part of the proposal the partner organisations will look at pedestrian crossings to maximise access to the station, as well as bus stops on Priestpopple itself to ensure an optimum network of passenger pick-up and drop-off points.
The partners have acknowledged that the proposal would involve the use of 75 of the existing 125 parking spaces at Loosing Hill Car Park, and are actively looking at how to replace lost car parking spaces across the town.
Councillor Anne Dale, portfolio holder for resources on Tynedale Council's cabinet said: "We are very pleased to be in a position to recommend a new and modern transport facility in Hexham. After considering all the issues around the existing site, and consulting with stakeholders, we feel that users would be best served by a pleasant new station at Loosing Hill.
"Implications for car parking will be taken seriously and we will be promoting car parking improvements wherever possible, including how the existing bus station site can contribute to this."
(CD/JM)
