NSW Sport Minister Natalie Ward announced on Monday that City of Newcastle would receive funding under the Greater Cities Sport Facility Fund for the Darling Street Oval upgrades.

The minister's office did not immediately disclose the level of funding, but it is understood the council asked for $500,000.

Olympic received $300,000 six months ago under the NSW Infrastructure Grants Program and is tipping in $200,000 of its own money for the $1 million project.

Mr Patsan attacked the Morrison government in July last year over the controversial allocation of funding under a community sport grants scheme overseen by federal minister Bridget McKenzie.

Olympic asked for $500,000 under the federal scheme and met the criteria but missed out to lower-ranked projects in targeted electorates.

"We don't mind if we missed out for very good reasons. What we cannot countenance is ... graft and corruption," Mr Patsan told a senate inquiry into the affair.

"We got diddled because we're in a Labor seat and a safe one."

He described Parliament as a "citadel of waste and poor expectations" and said Australia risked becoming a "banana republic" if the government could not follow its own rules on grants.

Less than a year later, the Darling Street Oval upgrade appears back on track after earning two substantial state grants.

The project includes new women's change rooms and reconfiguring the playing pitch.

The club gained development approval for the works in 2017.

Olympic secretary Con Gounis said on Monday that the club had not been informed about the new funding but welcomed the prospect of the project proceeding.

Newcastle MP Tim Crakanthorp and the council have been complaining for several years that the Newcastle local government area has been excluded from both the Greater Sydney and regional sport infrastructure grant programs.

Newcastle Basketball is moving its Broadmeadow base to the Lake Macquarie council area after receiving a $25 million funding commitment from the state government two years ago.

The government included both Newcastle and Wollongong in the latest funding application round for the newly named Greater Cities Sports Facility Fund at the end of last year.