When the Victoria Theatre in Newcastle opened in 1891, the audience was entertained with musical comedy and performances inside a prime example of Victorian theatre architecture.

"We actually had animals on stage," says Gillian Arrighi, from the University of Newcastle.

"There was a fighting kangaroo in the early days. There were horses on treadmills with moving scenery."

Like many around the country, the theatre closed in the 1960s and was converted into retail space for several decades, with most of its theatrical heritage stripped away.

With no photographic evidence of the theatre from when it first opened, Dr Arrighi and her team have scoured archival eyewitness accounts and architectural floor plans to recreate the theatre in the virtual world.

"It is because so many theatres have been lost, this offers us the opportunity to go back in time," she says.

The level of detail is immense, right down to a copy of the same constellation in the sky on opening night.

Vivid colours, ornate artwork and the extensive gas lighting that was used has also been incorporated into the VR experience.

The Victoria Theatre in Newcastle, as seen in an archive photo and through a VR lens. ( Supplied: Newcastle University )

"One of the biggest challenges for us was the lighting," says Vendela Pento, innovation manager at Newcastle University.

"Everything was gas lighting. Modern-day virtual reality is all electric lighting so we had to do a lots of baking [manipulating how light is cast from the source] of the lighting to get it looking realistic."

The technology is also helping to inform theatre researchers just how and why actors performed the way they did.

"Even though the stage house is very big and very deep, most of the performance would have happened very close to the stage because of the lighting technology," Dr Arrighi says.

The interior of the Victoria Theatre, as reimagined by Newcastle University. ( Supplied: Newcastle University. )

The research is part of the Lost Theatres Project involving 12 universities from across the country and run by AusStage, that national performance database that provides open access to live performance from 1789 to today.

For nearly 20 years, AusStage's goal has been to preserve and retrieve Australia's performing arts heritage, and make it freely available through digital means.

Julie Holledge from Flinders University in Adelaide says the virtual reality component is attempting to capture the "cultural memory" of the lost theatre.

"When you're working on retrieving lost events or you're studying lost events, you hit an inevitable problem in that the event no longer exists. It's like the hole in the middle of the donut," she says.

The owners of the Victoria Theatre, Century Venues, have plans to resurrect the venue — not with a complete restoration, but with a nod to its chequered past.

"Our policy is to touch the building as lightly as possible," says owner Greg Khoury.

"So unless something needs treatment, we'll seal it and keep it and much of the fabric you see now will be retained."

Victoria Theatre Greg Khoury said renovations will respect the building's heritage. ( ABC News )

The challenge now is to make that a reality, with about $10 million needed to get the doors to open as a 700-1,000-seat venue for comedy, dance, theatre and contemporary music performances.

Century Venues is able to commit about $3 million towards capital works and has sought funding from the NSW Government.

But the State Government has suggested it's unlikely to come to the party.

A spokesman for Arts Minister Don Harwin said the minister's officer had met with Century Venues over the Victoria Theatre revitalisation.

"Upon receiving a proposal for the project in March 2019 it was determined that the project was not eligible under existing programs," the spokesman said.