The work will extend the Pialligo track from 750 metres to 1100 metres to meet international standards.

Canberra Kart Racing Club representative James Ordish said the track extension would allow the club to hold international events and national championships, and also increase the popularity of karting.

"We can increase the patronage and the media coverage and the interest in the sport," he said.

Minister for planning and land management Mick Gentleman said the funding would be included in the upcoming ACT budget review, delivering on a 2016 election promise to make major upgrades.

Mr Ordish said the club had been disappointed when it thought it had been skipped in the 2016 budget.

"It's been almost a two-year road to get us to where we are," he said.

The club won development approval for a $3.5 million major revamp. Mr Ordish said the $200,000 extension was the first stage of redevelopment, changing the angle of the first turn and extending the track. Other funding was yet to be secured.

Mr Gentleman said having the ability to host international sporting events would bring major economic benefits to the ACT.

He predicted kart racers would travel from around the world to compete at Circuit Mark Webber.

"Karting can be an important start to an exciting motorsport career – many top drivers across the world started with karting, including Australia's own Mark Webber," he said.

Local company D Group would begin the work as soon as the money was available in the next few months, with construction to be finished in 2019, Mr Ordish said. The club is still talking to the construction company about keeping parts of the track open during work.