The AIS will sink almost $10 million into the venue formerly known as "The Palace" to revamp Canberra's premier indoor venue and breathe new life into the Bruce precinct.
The AIS Arena will get a facelift next year to refurbish seating, windows, toilets and the food services area to improve its facilities in the hope of attracting a variety of events.
The $9.4 million upgrade will force the Canberra Capitals to search for a new WNBL home at the for the end of their season, ending any prospect of 4000-strong crowds if Lauren Jackson leads them into the finals.
The AIS Arena is the oldest building at Bruce, built in 1981 and still largely in its original condition.
The AIS invested in a $200,000 removable floor last year to help it tap into new markets to increase revenue by attracting more sports, concerts, ice skating and even indoor equestrian events.
The Canberra Cannons would regularly sell out the venue, with fans flocking to The Palace during their NBL championship-winning era.
The Capitals have played almost all of their recent games at the AIS after previously splitting their games between the Arena and the Tuggeranong Southern Cross Club.
But they now face the challenge of searching for a new home to finish the 2015-16 regular season and any prospective finals matches.
"They're doing some refurbishment and we've been told that the arena is unavailable for the last two or three rounds for the regular season and then for finals," said Capitals general manager Lachlan Searle.
"That's not ideal, but it might mean we can look at some alternatives and come up with different places to play."
The AIS precinct has undergone a major overhaul in recent years, with sports moving their bases away from Canberra.
To ensure the facilities remain used, the AIS has set its sights on attracting sports teams and one-off events to generate revenue throughout the year.
The arena will remain the premier indoor venue for sports and concerts until a new undercover stadium is built in Civic within the next decade.
But the ACT government has been forced to delay that project while it foots the bill for the Mr Fluffy loose-fill asbestos clean-up.
The arena was built in 1981 and the refurbishment will involve better seating and the potential of windows to allow light into the enclosed stadium.
The 14-year-old parquetry floor was removed last year to leave only concrete on the ground after investing in a new surface which can be removed for different events.
The AIS will put the $9.4 million revamp out to tender in the coming weeks to find a suitable contractor to complete the work.
Basketball ACT put a $7 million upgrade of its Belconnen stadium on hold as it improves its financial stability.
It will force the Capitals to either relocate home games to Albury or downsize and play in Tuggeranong, where the Southern Cross Club seats about 1300 fans.