The New South Wales Government has backed down on its proposal to demolish the Sydney Olympic Stadium, which will instead be refurbished.

Key points: The refurbishment of Sydney Olympic Stadium will cost $800 million

The refurbishment of Sydney Olympic Stadium will cost $800 million Rebuilding Sydney Football Stadium is priced at $730 million

Rebuilding Sydney Football Stadium is priced at $730 million The new venues are expected to last for about half-a-century

Premier Gladys Berejiklian had come under increasing pressure over the $2 billion blueprint to raze the 80,000-seat stadium at Homebush.

The Government will press ahead with plans to demolish and rebuild the Sydney Football Stadium at Moore Park, with work expected to begin later this year.

Ms Berejiklian announced about "two thirds" of the Olympic Stadium would be refurbished, and said the new plan would save taxpayers $500 million.

"This will change the atmosphere of the entire stadium," she said.

"But importantly it will provide a rectangular stadium with fans closer to the action. That is what is required for a world-class stadium."

Stadium Australia was the centrepiece of the Sydney 2000 Olympic Games. ( AAP: Julian Smith )

The NSW Government's backflip comes a year out from the next state election.

Cabinet signed off on the stadiums plan last November, however, the policy caused divisions in the NSW Government.

The Premier said initial modelling had shown a complete renovation of the venue would have cost more than demolishing it and building a new stadium.

An artist's impression of the interior of the new rectangular stadium at Moore Park. ( Supplied: NSW Government )

'We've listened to the community'

Stadium Australia was due to be demolished in 2019 and would have cost $1.3 billion.

"We've listened to the community, we know the public would have thought that is too much to spend," Ms Berejiklian.

At a heated press conference in Sydney this afternoon, Ms Berejiklian brushed off the about face.

"We don't apologise for listening to the community and doing our homework," she said.

Sydney's Lord Mayor Clover Moore said she still had not seen a comprehensive business case for rebuilding or remodelling the stadiums.

"There is no budget breakdown so it is impossible to do an independent review of the figures, and after all this work the NSW Government still can't manage to stack up their figures so that they can claim to break even," she said.

"For all of this money, the NSW Government is estimating just a 15 per cent increase in patronage — with no explanation of how they'll attract more events or how they'll deal with them."

NSW Opposition Leader Luke Foley pounced on the spend, repeatedly saying he would fund schools and hospitals instead of stadiums if elected next year.

But battle lines were not only drawn between health and education funding versus sport, the debate became geographical when Mr Foley claimed the Government was prioritising Sydney's affluent eastern suburbs — where the Football Stadium is — over the west.

Labor unveiled an anti-stadium election campaign emblazoned across a bus less than a fortnight ago. ( ABC News: Jean Kennedy )

The rebuilt Sydney Football Stadium is expected to seat 45,000.

Ms Berejiklian also announced the NRL grand final would remain in Sydney for the next 25 years, and said the city would have lost major events had her Government not invested in stadiums.

Independent body Infrastructure New South Wales assessed the various business cases for both venues.

NRL CEO Todd Greenberg was pleased with the announcement.

"Naturally I would have preferred to see a new stadium built at Sydney Olympic Park in line with our Memorandum of Understanding," he said.

"But this remains the biggest infrastructure program the game has ever seen, one that gives our fans a new level of stadia facilities."