Taree's Saxby's Stadium will be transformed into the Iron Arena through an $8.2 million grant from the federal and State governments.

The upgrade will include five indoor courts and the installation of retractable seats. This will create a 'show court' for larger scale sporting and entertainment events and seat 1300 patrons.

Iron Arena development committee chair, Taree Basketball president Steve Attkins, said the facility has been a long term dream for sports groups.

"Taree has outgrown the current facility. This expansion of Iron Arena will fill a void in the sporting community allowing us to cater for larger events, like state championships," he said.

"A facility like this isn't just beneficial to the sporting groups, it will also help Taree build a stronger economy through sports-led tourism and allow our region to cater for a broader range of entertainment and other events."

When completed, the arena will be able to attract high profile events at the local, regional, State and national level such as basketball, futsal, volleyball and indoor hockey.

Trade shows and concerts will also be held inside the building for the first time.

"This funding will transform Saxby's Stadium into a regional complex fit to host major sporting and entertainment events, support the health and wellbeing of locals and the careers of rising sports stars," Member for Myall Lakes Stephen Bromhead said.

"Sport is such an integral part of our community, and while the current stadium has served the community well for 40 years, the added floor space will accommodate more hours of competitions, social matches and training sessions."

Member for Lyne Dr David Gillespie said the upgrade will be a boost to the local economy.

"This project is shovel-ready and will immediately deliver much needed stimulation to our region's economy which has been ravaged as a result of drought, bushfires and COVID-19," Dr Gillespie said.