Creating a stable and sustainable health workforce in regional, rural and remote Australia has long been a challenge to health workforce planners, policy makers and researchers alike. Traditional health workforce planning is often reactive and assumes continuation of current patterns of healthcare utilisation. This demonstration project in Far North Queensland exemplifies how participatory regional health workforce planning processes can accurately model current and projected local workforce requirements. The recent establishment of Primary Health Networks (PHNs) with the intent to commission health services tailored to individual healthcare needs underlines the relevance of such an approach. This study used action research methodology informed by World Health Organization (WHO) systems thinking. Four cyclical stages of health workforce planning were followed: needs assessment; health service model redesign; skills-set assessment and workforce redesign; and development of a workforce and training plan. This study demonstrated that needs-based loco-regional health workforce planning can be achieved successfully through participatory processes with stakeholders. Stronger health systems and workforce training solutions were delivered by facilitating linkages and planning processes based on community need involving healthcare professionals across all disciplines and sectors. By focusing upon extending competencies and skills sets, local health professionals form a stable and sustainable local workforce. Concrete examples of initiatives generated from this process include developing a chronic disease inter-professional teaching clinic in a rural town and renal dialysis being delivered locally to an Aboriginal community. The growing trend of policy makers decentralising health funding, planning and accountability and rising health system costs increase the future utility of this approach. This type of planning can also assist the new PHNs to commission health services that meet the needs of the population and contribute to service and system improvement and innovation.