The ACT is to pay $317 million for a new 2000-seat theatre on London Circuit in Civic.

The government, which has signed a contract with Multiplex, said construction would begin early next year with completion in 2028,

The new lyric theatre – a large-scale performance venue designed for major productions such as musicals, ballet and opera – would feature a large stage for big casts and sets, technical performance capability and excellent sound quality. With greater seating capacity than the Canberra Theatre, it would be capable of attracting large-scale theatrical shows on the national touring circuit.

The existing theatres at the Canberra Theatre Centre were too small for major shows to be profitable.

The National Capital Authority provided main construction works approval in November, following public exhibition between September and October.

The government said that by year five of operations, the theatre was projected to contribute $33.7 million annually in direct expenditure, representing 111,000 visitor nights each year.

The Canberra Theatre Centre will remain open during construction.