The Federal Government has agreed to split the cost of building new infrastructure for the 2032 Olympics, including an overhaul of the Gabba.
But it comes on the proviso that it gets a say in how the money is spent.
The State Government last week unveiled a proposal for a $1 billion refurbishment of the Gabba, which would become the centrepiece of the Games if south-east Queensland is named as the host.
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The stadium would have its capacity boosted to 50,000 and would be used for the opening and closing ceremonies as well as the athletics.
But Premier Annastacia Palaszczuk warned it could only happen if Canberra went halves, and demanded a decision by this week.
Prime Minister Scott Morrison wrote to the Premier on Monday to commit funding for Games infrastructure if Queensland agrees to establish an Olympic Infrastructure Agency.
“We have always believed in the potential of the 2032 Olympic Games for Queensland and Australia and it’s important we maintain momentum to win this bid,” Mr Morrison said in a statement.
“Backing the Queensland bid means more jobs, better infrastructure and more tourism dollars. Just like the Sydney 2000 Games, the Queensland bid has the opportunity to reshape our country.
Ms Palaszcuk welcomed the announcement, which comes as an IOC deadline loomed on funding guarantees for the event.
“This is a huge win for Queensland. I always say ‘we work best when we work together’. This proves it.”
Mr Morrison says it was important the Federal Government had a say in how its funding would be spent.
“All levels of government must work together and take the politics out of each decision.
“Our offer is for a genuine partnership, with shared costs and shared responsibilities, working together to make this the best Olympics on record.
The spending by the Federal Government will far exceed the money it spent on the Sydney 2000 Olympics, where Canberra contributed just $150 million to the cost.