The redevelopment, which will include a new 5-star hotel, more restaurants and bars and improved entertainment and gaming facilities, follows an agreement with the NSW government to extend Star City's exclusivity and concession arrangements for 12 years.
Construction is expected to start in early 2009 and be completed in 2011.
The project will involve around 750 new construction jobs over the next three years and create an extra 900 hotel and casino jobs when the expansion is completed.
Tabcorp chief executive of casinos Walter Bugno said Star City was more than ten years old and needed an overhaul.
"This is our chance to build a world-class casino and entertainment complex,'' he said.
Mr Bugno said the final floor plans were still being designed so it was too early to be specific about the proposed facilities.
But he envisaged there would be around 17 restaurants and eleven bars in the new complex.
Mr Bugno said that under the new licence agreement with the NSW government, Star City could operate additional gaming tables subject to Casino Control Authority approval.
There would be no expansion of electronic gaming machines, and the current cap of 1,500 gaming machines remained in place
Tabcorp shares were eleven cents higher at $7.96 at 10.27am (AEST) today.
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