A new multi-purpose 5,000-capacity stadium is being built as part of a major redevelopment project for Melbourne Park – the home of the Australian Open tennis tournament.

The show court and arena will be surrounded new, smaller developments, such as a cultural terrace, a function centre, a media centre and broadcast studios, and a central kitchen.

The cluster of facilities makes up the third stage of the larger overall project, which includes the redevelopment of the landmark Rod Laver Arena.

A funding package of AS$271.6m has been put together by central government, the Victorian local government, Tennis Australia and Melbourne Olympic Parks for the completion of stage three, which will begin in 2019.

The planned facility improvements have strengthened Melbourne Park’s case for its continued hosting of the Australian Open. It has now secured Grand Slam tournament until at least 2036.

John Eren, Australia’s minister for sport, said: “Melbourne is the sporting and events capital of the world, and we’ll keep it that way.”

“The project will mean more visitors, more jobs, and even more chances to showcase to the world that Victoria has the best of everything,” added Victorian treasurer Tim Pallas.

The architect for the final scheme has not yet been revealed.

Melbourne's Rod Laver Arena set for 'most significant' revamp in its history