Key Points:

Carisbrook, the 130-year-old rugby ground in Dunedin, is to be abandoned in favour of a stadium costing up to $180 million in time for the 2011 Rugby World Cup.

The University of Otago will be a major financial partner in the multipurpose stadium, costing between $150 million and $180 million, planned to replace Carisbrook.

The venue is likely also to become the new home for the university's signature School of Physical Education.

The Carisbrook Stadium Trust announced last night that it had all but abandoned the option to upgrade Carisbrook in favour of replacing the stadium.

The announcement was expected, but the trust's coup was confirmation that the university would join the project, owning part of the stadium and contributing significant financing towards it.

The relationship will be the first of its kind for a stadium in New Zealand.

The announcement said the Otago Rugby Football Union would be the anchor tenant and the stadium would be the home for Otago and Highlanders rugby.

Day-to-day management of the stadium would lie with the trust, which intended attracting concerts, other sports outside of rugby, and seminars to the facility.

The facility could also create an opportunity to establish a New Zealand High Performance Sports Centre in Dunedin.

Trust chief executive Malcolm Farry said financial details were not complete, but the stadium could cost between $150 million and $180 million.

Plans could include capacity for up to 32,000 and for a roof, although that would depend on the cost.

Two waterfront sites in the vicinity of Logan Park were being considered, he said.

"It will revolutionise our city and create a new vibrancy to our region."

University vice-chancellor Professor David Skegg confirmed the university would put part of its $140 million capital expenditure towards the project.

The joint venture would solve problems for both the trust and university, he said.

Dunedin and southern New Zealand had faced a major decision about the future of Carisbrook and its continued status as a test venue.

The university has a capital development plan to alleviate serious space shortages for students. The time frames for the two issues were almost identical.

Dunedin-founded company Arrow International has agreed to conduct development management planning for the stadium and oversee two feasibility studies in the next eight months.

An international design competition will be held to come up with an "innovative" and cost-effective design.

It is expected the stadium would be completed by October 2010 and allow a full Super 14 rugby season to be played there before the World Cup.

A final decision on whether to go ahead with the project will be made at the completion of feasibility studies.

Mr Farry conceded the decision would ultimately depend on the availability of funding. While that had yet to be secured, he said sources would include the university, naming right sponsors, ground members, Community Trust of Otago, corporate sponsors, shares, bonds, and the Dunedin City Council and Otago Regional Council.

"This project hinges on the support of all our funding parties," Mr Farry said.

"If this isn't supported by the wider community and the city and regional councils, then it would be a significant obstacle."

He was adamant any council funding should come from existing capital expenditure and a re-evaluation of existing projects, rather than raising rates.

If the funding cannot be achieved, it is understood the trust would then revisit plans for upgrading Carisbrook, an option expected to cost $50 million.

Professor Skegg said the project was an exciting opportunity for the city to consider something more than a traditional sports stadium, which is unused for long periods.

A stadium complex including the university amenities would be a major drawcard for students coming to Dunedin, he said.

Bye, bye Brook

* Land once owned by the Presbyterian Church Board first used for cricket in the 1870s.

* Rugby, races and even a Gilbert and Sullivan opera staged at Carisbrook.

* Known in the rugby world as the House of Pain, after Otago's uncompromising play.