An $11 million initial upgrade of Albury's Lauren Jackson Sports Centre has been put on ice

The work, which will see the spectator capacity in the stadium increased and flooring upgraded, was planned to begin after the Australian Country Junior Basketball Cup in January.

However, the council was recently told it had not succeeded in an application for $5 million in NSW government funding for the project.

The money, from the multi-sport community facility fund, was to be combined with $6 million from the council to finance the work which is stage one of a revamp of the East Albury arena.

In response, the council will reallocate its $6 million to a budget beyond this financial year and make another submission for government assistance, via the second round of the multi-sport fund which is now open for applications.

Council staff have determined construction will not occur until funding has been confirmed.

Albury MP Justin Clancy said he had not been told why his government had rejected the funding bid.

"It's certainly disappointing," Mr Clancy said.

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"It's a fantastic project, Lauren Jackson is a significant regional sports centre, so we will certainly be following up to seek feedback."

Mr Clancy said he would be "actively" supporting a second application for taxpayer cash.

At an open council briefing last month, the city's business and lifestyle manager Ambrose Glass said it was planned to carry out the work from January to December next year.

He said Wodonga Council and schools had been approached to provide stadiums in lieu of the Lauren Jackson centre not being available for basketball and other sports and there had been a positive response.

Meanwhile, stage two of the stadium's makeover will be on the agenda of Monday night's council meeting.

Councillors will be asked to endorse a plan to seek feedback on the scope of the further upgrade, which includes the possibility of a regional aquatics centre being built in the precinct as well as extra courts and a new entrance.

Under a proposed timeline, feedback on how the redevelopment could proceed will be sought between September and December with a draft report to be presented to council next February before being exhibited publicly for comment.

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