The Australian Institute of Sport in Canberra has been thrown the funding lifeline to build housing for athletes, an indoor training facility and a high-performance training and testing centre.

The package will “rescue” the neglected facility, Prime Minister Anthony Albanese said as he unveiled the package ahead of Tuesday’s federal budget.

“This facility has been allowed to decay and not be as good as it should be,” he told reporters on Friday.

“By making this announcement today, we position ourselves to be in a really positive frame in the lead-up to 2032, when we will host for the third time the Olympics that will be so important in Brisbane.”

The funding comes as part of the government’s response to an independent review into the state of the AIS.

A further $10 million will be set aside to develop a precinct masterplan to ensure the Bruce site is fit for purpose.

The funding will be made available in the budget while a detailed plan for the site’s redevelopment is finalised.

Sports Minister Anika Wells said investment was needed now as it takes up to eight years to prepare an athlete for the highest level of competition.

“When it was first built, the AIS was so successful in preparing our medal winning athletes that it was replicated by sporting nations around the world and became the benchmark for achieving athletic success,” she said.

Acting ACT chief minister Yvette Berry said it was a great day for Canberra as the overhaul would create local jobs and recognise the city’s role as the national capital.