A controversial art project that has already cost the City of Sydney millions of dollars has been labelled the lord mayor's "vanity project" during a fiery council meeting.

Clover Moore's opponents criticised the failed Cloud Arch sculpture as an "unmitigated disaster from the outset" as the majority of councillors voted to hit pause on the troubled project at the meeting on Monday night.

The council blamed cost blowouts and light rail construction for its decision to cancel the proposed tender for the Junya Ishigami-designed steel archway planned for George Street and defer consideration of the project until after the tram line is finished.

An artist's impression of the Cloud Arch art sculpture. Credit:City of Sydney

It emerged last week that the price for building the arch, which at one stage was to have cost about $3.5 million, had blown out to $22 million. That was on top of the $2.25 million the council has spent on the artwork over the past three years.