ALMOST 25 years after its reopening for the bicentennial, Darling Harbour will be dug up again to make way for Australia's largest convention and exhibition space as part of a billion-dollar facelift.
The overhaul will be bookended by a 900-room hotel on the northern end of the precinct, plus shops, offices and hundreds of apartments in a new urban neighbourhood dubbed ''The Haymarket'' to its south.
Government unveils Darling Harbour plan
The NSW government presents its preferred plan to transform the Sydney International Convention, Exhibition and Entertainment Precinct at Darling Harbour. Vision: NSW government.
Under two separate agreements for these areas, covering more than a quarter of the 20-hectare site, Lend Lease will pay the government an undisclosed sum - with a final expected value of $1.5 billion.
Infrastructure NSW, which is running the entire process, will enter into detailed negotiations with the preferred bidder for the public facilities, the Destination Sydney consortium - comprising Lend Lease, AEG Ogden, Capella Capital and Spotless.
To be finalised by the middle of next year, the contract for the O'Farrell government's first public-private partnership will require Destination Sydney to build the convention, exhibition and entertainment facilities and maintain and operate the sites for 25 years.
The redevelopment of the venues, announced on Tuesday, including public domain upgrades, is expected to cost about $1 billion.
INSW's chief executive, Paul Broad, said the state government would make an annual payment of ''less than $100 million'' for each year of the 25-year concession once the facilities were completed.
The agreements with Lend Lease come despite a court battle between the company and the state government's Barangaroo Delivery Authority over the nearby Barangaroo South development, which could leave taxpayers millions of dollars out of pocket.
Destination Sydney's bid beat the VeNuSW consortium of Plenary Group, Brookfield Multiplex and Sydney Place Management. The plans were assessed on price and criteria such as the development of a precinct master plan and business plan, design and delivery strategy.
The Premier, Barry O'Farrell, said the redevelopment, stretching from Cockle Bay to Haymarket and Ultimo, would deliver a $5 billion economic benefit to NSW over the life of the deal.
''Along with the development of Barangaroo, this project will transform the western fringe of Sydney's central business district and is the biggest and most exciting change to Darling Harbour in 25 years,'' he said.
"This plan fulfils a key election commitment and will create jobs for 1600 people during the three-year construction, which starts at the end of 2013, and provide ongoing employment for 4000 people across the precinct."
The new convention centre would have the capacity to accommodate more than 12,000 people across several dedicated spaces - including Sydney's largest ballroom, with room for 2000 people.
At 40,000 square metres, the site's total exhibition space would outstrip the 30,000 sqm available in Melbourne. The
''biggest total meeting room space in Australia'', at 8000 sqm across 42 rooms, would link the convention and exhibition areas.
An extra hectare of public space will be ''renewed and upgraded'' to deliver an expanded Tumbalong Park that could accommodate an outdoor event for up to 25,000 people.
All facilities will have free wireless connections, and there will be free wi-fi hotspots throughout the public open space.
Pedestrian links will be improved to connect Central, Chinatown and Cockle Bay Wharf, as well as Ultimo, Pyrmont and the city.
The Haymarket would contain up to 1400 apartments, plus accommodation for 1000 students, high-tech businesses, shops, cafes and restaurants.
''This development creates a cosmopolitan neighbourhood in the heart of the city at The Haymarket that is humming with life, seven days a week,'' Mr O'Farrell said.
To be opened in stages from the 2020s, the new neighbourhood would be built on land now occupied by the Sydney Entertainment Centre and its car park, which will be closed from December 2015.
The existing convention centre will close in December next year, and the new facilities are due to open in December 2016.
A temporary exhibition space will be built on Glebe Island. Five groups have submitted tenders to design, build, operate and remove the interim facility, which will host events while the redevelopment is under way.
The government says Darling Harbour will stay ''open for business'' during the three-year construction period.
The Sydney Harbour Foreshore Authority will work with the developers and retailers to keep the tourist precinct ''active''.
It has formed a partnership with core Darling Harbour tenants, including IMAX, Sea Life Sydney Aquarium, the Harbourside shopping centre, Cockle Bay Wharf and Darling Quarter.