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The 2026 Commonwealth Games will not go ahead in regional Victoria, with the state government cancelling the event with less than three years to go.

Deputy premier Jacinta Allan confirmed Eureka Stadium will be upgraded, with a new athletics facility to replace Llanberris, and Miners Rest will also get a new sporting facility, while Creswick will get a major upgrade to its mountain bike facilities.

It's not clear if all of the budgeted projects, like the train station upgrade, will now go ahead.

Speaking at a press conference in Melbourne, Premier Daniel Andrews said the games will be cancelled, but a regional package of over $2 billion will go ahead.

"Each and every one of the legacy benefits will be built," he said.

"A very substantial regional tourism fund, a package for community based sport, and most importantly, $1 billion boost for social and affordable housing right across regional Victoria."

New estimates predict the games would cost $6 to $7 billion, he said.

"I will not take money out of hospitals and schools to host an event that is three times the cost estimated and budgeted for last year," he said.

Commonwealth Games organisers in London had been contacted last night, he said.

The games would be held in Ballarat, Geelong, Bendigo, and Morwell, with an opening ceremony at the MCG.

Ballarat was due to host the athletics and para-athletics at Eureka Stadium, and the boxing at Selkirk Stadium, while Creswick would have hosted mountain biking events.

Announced in 2022, with $2.6 billion committed in the 2022-23 state budget, Ballarat would have received a desperately-needed upgrade to its train station, as well as capacity upgrades and a new athletics facility at Eureka Stadium.

The athletes' village, one of four across the state, would have been built at the former Delacombe saleyards, with a remediation program to begin years ahead of schedule so townhouses could be built.

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