A landmark $7 billion funding deal for Brisbane 2032 Olympic and Paralympic venues has been signed by the Queensland and federal governments.

It will mean a complete rebuild of the city’s Gabba stadium, to be solely funded by the state government, while Canberra will foot the entire bill of a new 17,000-seat Brisbane Arena at Roma Street.

The two projects will make up the bulk of the spending, while nearly $2b has been earmarked to upgrade existing venues and build smaller facilities.

Prime Minister Anthony Albanese and Premier Annastacia Palaszczuk sealed the deal in Brisbane on Friday.

“I know, as a Sydneysider, the difference a Games can make,” Mr Albanese said.

“This will consolidate this great city as a global city, as a global powerhouse.”

The Brisbane arena project includes a drop-in swimming pool that will be removed after the Games to create an entertainment venue.

“That will be a venue that will last for many decades into the future,” Mr Albanese said.

Cost is rising

The state has committed $2.7 billion for the Gabba rebuild, increasing its capacity by 8000 seats, to 50,000, and land between the stadium and nearby Southbank will be declared a priority development area.

“This is about setting Queensland up not just for the next 10 years but the 10 years thereafter,” Ms Palaszczuk said.

The Premier acknowledged commodity prices meant the Gabba project, originally estimated at $1 billion in 2021, was getting more expensive.

The state government says completely building the stadium, which is the home of the Brisbane Lions AFL team and hosts international sports events, is cheaper than refurbishing it to modern standards.

The new Gabba will be the official home of the Brisbane Olympic and Paralympic Games and include a pedestrian walkway linking it to the nearby public transport.

It is being billed as “one of the most accessible stadiums in the country”.

But uncertainty about what the project means for East Brisbane State School, which sits next door, has caused local anxiety.

The state government on Friday confirmed the location will be unviable beyond December 2025 and the school will be relocated nearby.

“I always said we would carry out consultation with the school community as soon as we knew more about the impact of the Gabba redevelopment on the school,” Education Minister Grace Grace said.

Parents say they’ve been kept in the dark.

“This has caused anxiety in our children and disquiet in our community,” East Brisbane State School Olympics Impact Group chairwoman Nicky Middleton said in a Facebook post on Friday.

The Greens say the project is deeply unpopular at a local level and a waste of money.

Greens: Keep the Gabba as it is

“By refusing to directly fund the Gabba demolition the federal government has acknowledged the project is a disaster but let’s be clear, by funding half the Olympics infrastructure they are subsidising this disgraceful demolition,” the party’s federal housing spokesman Max Chandler-Mather said.

Ms Palaszczuk said more than 80 per cent of the Games’ infrastructure already existed, much on the Gold Coast – which hosted the 2018 Commonwealth Games.

Both governments will commit to almost $1.87 billion for five new venues and upgrading nine existing venues.

The new include indoor sports centres at Breakfast Creek, Chandler, Sunshine Coast and Moreton Bay to host basketball, wheelchair basketball, gymnastics and boxing.

There will also be a whitewater venue in Redlands for canoe events and potentially an indoor sports centre at Logan for training or competition.

-AAP