The NSW government wants to bulldoze longstanding greyhound racecourse Wentworth Park and build some 7300 homes across a 14-hectare precinct in central Sydney.
The lease for the crown land parcel is due to expire in 2027 and will be transferred from Greyhound Racing NSW to the City of Sydney, converting into 20 community sports fields.
Rezoning will be configured in collaboration with the state government to allow for the construction of homes, green recreational spaces and transport hubs.
"We recognise Wentworth Park holds deep history and meaning for many people, and we know some will be disappointed by this change," Premier Chris Minns said.
"But cities change and we have a responsibility to plan for the future."
He argued that besides expansion into newer suburbs on the fringes of Sydney, Wentworth Park offers potential to densify with infrastructure already in place.
It is one of the many proposals the Labor government has pitched to keep NSW residents from moving interstate for cheaper housing.
Australia's most populous state needs to build 377,000 homes to deliver its share of an ambitious national target of 1.2 million dwellings by 2029.
The number of homes NSW has completed so far is about 43,000, according to the Australian Bureau of Statistics.
Mr Minns was a vocal advocate of buying Rosehill Racecourse in densely populated western Sydney for about $5 billion and turning the 140-year-old track into a "mini-city" of about 25,000 homes.
But despite being backed by executives of owner the Australian Turf Club, more than 55 per cent of the club's 11,000 members voted against the pitch in May.
Built in 1882 on swampy land, Wentworth Park became a hub for sporting events and concerts followed by greyhound racing in 1932 and doubled as a camp for American troops during World War II.
A large grandstand for racing enthusiasts was built four decades ago but the sport has courted controversy for cruelty to dogs.
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