The decision will give council a further six months to try to raise an addition $2.9 million in funds externally for stage two whilst the contracted build of stage one begins.

The full redevelopment of the Roxy will restore the heritage building and serve as a theatre with two cinemas, a CBD activation hub and the Roxy Institute of Performing Arts which will run as an outpost for artistic excellence.

After council acquired to former Movie Cafe and Crate Cafe in 2020, the footprint of the project was expanded, bringing with it additional and expensive costs.

Leeton council's general manager Jackie Kruger said that the decision to continue with the project in planned full capacity despite the budgetary shortfall was not one made lightly.

"Nearly two years ago council extended the footprint to include the Movie and Crate Cafes in response to community feedback to lessen the impact on the heritage fabric of the Roxy building," Mrs Kruger said.

"This extension has added significant opportunity to the project, but also increased build complexity as it has become apparent that elements of the extended footprint are best scheduled earlier in the project if they are going to be delivered in the most affordable way possible."

According to Council, the tendering process has now revealed staging the project is most efficient by separating out elements of the full project, rather than floor area.

The elements that will now be in stage two are the theatre equipment, fit-out of the theatrette (including projection) and the details of the foyer/bar area.

Councillor Michael Kidd said that Council's decision has provided certainty for the community.

"We have been working on the Roxy project for over five years. We have engaged extensively with community and what we are delivering is an intergenerational legacy here that will inject another 92 years of life into a grand old lady," Cr Kidd said.

"It's time to stop talking and make this happen."

Councillor George Weston spoke in full support of the project, urging his fellow councillors not to be apprehensive about the cost as the project will be loan funded over 20 to 30 years, so will be shared by ratepayers across generations and will not have to be covered by only today's ratepayers.

Councillor Tracey Morris, who is also on council's audit risk and improvement committee, spoke about the importance of being a progressive town, as this attracts people to come and live and work in Leeton Shire.

"Having a thriving CBD and arts sector will provide important impetus for our local economy," Cr Morris said.

"With the National Institute of Dramatic Arts confirming RIPA is their regional partner in NSW, we have the best opportunity ever of ensuring our theatre is open for business nearly every day of the week.

"For reactivating our main street this is priceless."

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Leeton Shire mayor Paul Maytom said the matter was thoroughly debated, with councillors understanding the implications from every angle for their decision to go ahead with the project.

"This would be one of the most significant decisions and investment we have ever made as a council and I will do my level best to ensure the federal government steps up with their share of funding support for this project, just as we have as a local council," Councillor Maytom said.

A meeting will be held in November to discuss what opportunities exist to close the funding gap for stage two of the project.

"If ever a project was worthy of federal funding, this is it," Cr Maytom said.

External funding secured to date is almost $4 million from CreateNSW and $1 million from the Murray-Darling Economic Development Fund.

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