A new multi-purpose 5,000-seater stadium is to be built at Melbourne Park as part of efforts aimed at keeping the Australian Open grand slam tennis tournament at its current site, Victoria state treasurer Tim Pallas said on Sunday.

Pallas said work on the stadium, which is part of a $271 million development programme, would begin in 2019, Australian Associated Press reported. The stadium would be used for tennis, basketball, concerts and other sports, the report said.

The tournament has been shared among Melbourne, Sydney, Adelaide, Brisbane, Perth and New Zealand since its inception in 1905 but has been played at its current home since 1988.

Reports in recent years have suggested not only Sydney but international cities including Shanghai and Dubai would be keen to host the tournament, which is dubbed the 'Grand Slam of the Asia Pacific'.

But Pallas said the slam was going nowhere.

"It is a pretty good facility, but we want the best facility, not only in the nation but in the world," Pallas told reporters.

"The players love these facilities. Importantly, I think Victorians have come to love these facilities."

The project would bring an additional 600 new jobs in the construction phase and supports thousands more in the tourism and hospitality sectors once finished, the report quoted state sports minister John Eren as saying.