The home of the Australian Open has entered the third and final stage of a major $972 million facelift.

The $271.5 million stage three redevelopment will also include a new function and media centre, pre-event spaces, interview rooms, a 200-seat auditorium and broadcast studios along with the construction of a new multi-purpose 5,000-seat sunken show court arena and a central logistics hub.

Heavy machinery has moved in and significant demolition underway. The new arena is set to add 5000 new seats for tennis fans and access is likely to be included in the cost of a ground pass.

The new stadium is aimed at cementing Melbourne Park as the home of the Australian Open for decades to come. (9News)

Australian tennis great Todd Woodbridge praised the Labor government’s ongoing investment in the tennis centre saying that having a “show court that everybody can access” just with a ground pass “is amazing.”

“It brings in more families, it brings in more kids, and exposes more of the top players onto courts outside of Rod Laver Arena and Melbourne Arena,” Woodbridge said.

Construction on stage three of the major project is due to be completed in time for the 2023 Australian Open with tennis officials confident construction won't disrupt the tournaments held at the centre in the interim.

This is the final stage in the Labor government's redevelopment plan. (9News)

The major face lift carries a price tag of $972 million . (9News)

“We'll have a big space to overlay and to ensure that all the facilities that we can provide to our fans, to players and to media will be in place for this year and won't have an impact,” said Tennis Australia’s Tom Larner.

The final stage of the upgrade is part of the Andrews government’s deal with Tennis Australia aimed at ensuring the Australian Open stays in Melbourne until at least 2036.

Minister for Sport and Major Events Martin Pakula said ongoing investment into the “best facilities, venues and infrastructure” was key to maintaining Melbourne’s crown as the sporting capital of Australia.