New York City’s Department of City Planning is recommending that Madison Square Garden get a new permit to operate above Penn Station — with a major caveat: Owner James Dolan will have to cooperate with the MTA and other railroads to rebuild the transit hub below.

The requirement is one in a package of concessions that the Adams administration wants the DCP and City Council to demand from Dolan, in exchange for allowing MSG to operate for another 10 years.

City planning officials said Monday the provision was designed to ensure that the Metropolitan Transportation Authority and city officials have leverage with the Dolans as the railroads develop their plans to redesign and reconstruct Penn Station.

“We hope and expect that the rail agencies will deliver a great plan for Penn Station, and MSG has committed to collaborating with them,” said City Planning Commissioner Dan Garodnick in a prepared statement.

“But we won’t just take them at their word – we are requiring MSG to come back to the Commission once those plans are 30% complete to ensure that the arena remains appropriately compatible.”

The measure requires that MSG be ‘compatible’ with the Penn Station plans drawn up by the MTA — including allowing the railroads to potentially make major changes to the above-ground portion of the complex — or else the Dolans could lose the permit, a city planning official explained to reporters during a briefing.

The exact terms of any property transaction required by the compatibility provision, like the space or price, would still have to be hammered out between the MTA and MSG.

The MTA is still working to finalize its Penn Station plans, which it estimates could cost as much as $7 billion. It’s leading the project on behalf of both New Jersey Transit and Amtrak.

A private company, ASTM Group, launched an effort to win the work earlier this spring, promising a lower $6 billion price tag for the construction work.

That work would be done as part of a larger 50-year arrangement that would charge the MTA, Amtrak and New Jersey Transit an estimated $250 million annually to operate the station, bringing the overall price tag to an estimated $12.5 billion.

Garodnick said the City Planning Commission is expected to vote on his staff’s recommendation by Wednesday.

The proposal would then be forwarded to the City Council, where lawmakers have approximately two months to accept, amend or reject them under the Big Apple’s zoning regulations.

Additionally, Garodnick said Monday that MSG had agreed to make a number of other changes to “The World’s Most Famous Arena” while the fight over the larger reconstruction of Penn Station below-ground plays out.