"I think that Ballarat does not really know what is coming," City of Ballarat mayor Daniel Moloney said.

A new athletics track will be built on the current showgrounds site and 5000 permanent seats added to Eureka Stadium, also known as Mars Stadium.

Improved accessibility will also be part of the $150 million precinct upgrade from the state government, tying in the Selkirk basketball stadium - which will host boxing - and surrounding ovals and courts.

Cr Moloney said the announcement was "huge" and could be one of the biggest announcements to upgrade a council facility in town.

"I think we have jumped a decade in one afternoon, in one announcement," Cr Moloney said.

"If anyone had said to us 12 months ago that we would have been standing here welcoming this level of investment to our city, I think we would have had to have our temperature checked."

Previously Eureka Stadium has held sporting events like AFL and A-League soccer but Cr Moloney said he was excited about the city's future once this investment at the wider sporting precinct opened up new possibilities.

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"The potential for us to bid for trade shows, major concerts and bigger and bigger sporting events is huge," he said.

"Even just having an athletics track on the current showground site will be fantastic for emerging athletes as well."

He said in terms of visitation it was going to be one of the biggest events in the 2026 Games line-up and pulling off the logistics of the Games would open doors for Ballarat based on the reputation gained at an international event.

"Even though the seating capacity is going to be just over 30,000, you still could have 50,000 individuals go through that ground every day," Cr Moloney said.

Committee for Ballarat chief executive Michael Poulton said the stadium did not have to be huge to fulfill its purpose, with 18,000 games seats being temporary but the 5000 permanent seats boosting its long-term capacity.

Ballarat has been put in a position similar to Metricon Stadium on the Gold Coast which was used for the 2018 Games.

Mr Poulton, who has experience from the 2018 Games, said Metricon Stadium had continued as "a really impressive" facility since the popular sport event was held there.

Mr Poulton said the success of Metricon Stadium was the ability to capitalise on the "cultural and entertainment side of their business" alongside sporting events.

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