Construction on the new Albury Regional Skatepark has begun with the demolition of the old park beginning earlier this week.
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The $3.4 million project is set to completed by December. The new park will include two covered bowls, a street skating section, an outdoor half basketball court and a fitness/parkour area.
The NSW government put in $635,511 of the funding as part of round three of the Stronger Country Communities Fund.
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Albury mayor Kevin Mack said council believed the old skate park had lived past its useby date and an upgrade was needed.
"Local skaters and community groups wanted us to something about it and had done so for some time," said Mr Mack.
The mayor said he even received feedback on the project from someone in Wollongong wondering why Albury was getting this kind of upgrade and they weren't.
"Clearly it's the envy of skaters in Wollongong so maybe we'll get some of them down here."