The ACT government will need to step in with a financial contribution to secure a future for Canberra's largest indoor sport and entertainment venue, the federal government says.
The Canberra Times revealed on Monday the AIS Arena had shut its doors, with no timeline for reopening.
Federal Sport Minister Richard Colbeck said coronavirus-induced shutdown measures had provided an opportunity to complete much-needed infrastructure work at the arena, but the future of the venue was still being considered.
ACT Sports Minister Yvette Berry said she was shocked by the news and had continually raised the state of the AIS Arena with Mr Colbeck.
"Following this decision I will again be asking the federal Minister for Sport for certainty that this facility will continue to be available to the Canberra community," she said.
Mr Colbeck said he hadn't "walked away" from those discussions and the future of the AIS Arena would "involve some contribution from the ACT government".
"It is no longer central to the activities of the Australian Institute of Sport," he told ABC Radio Canberra on Tuesday.
"The institute's role is to provide the best possible facilities for the development of athletes so they can perform at their best on the national and the global stage, it's not necessarily about providing an entertainment venue."
"There will be some infrastructure we'll have to talk to the ACT government about on that site including the arena and the stadium.
"There are some issues with the stadium and its future, and clearly there's some infrastructure issues with the arena."
The arena has hosted popular acts including The Wiggles and Human Nature several times, as there is no suitable alternative.
Upcoming performances by Guy Sebastian and Delta Goodrem have been cancelled.
Mr Colbeck said his door was open to the ACT government to put forward their plans.
He also said should territory and federal governments enter into a deal, the Commonwealth would wear the majority of the cost.
"The dominant funding should lie where the responsibility lies," he said.
"What we do with respect to the stadium is going to be another really important thing for not only the AIS but probably more so for the ACT."
Mr Colbeck said he wanted the institute to return to its status as a global leader in sport.
"It doesn't hold that in a way that it once did."