NSW Deputy Premier and Minister for Regional NSW Paul Toole said the funding, allocated as part of the state government's Regional Sport Facility Fund, was in addition to a further $1 million of improvements to Olympic Park announced in the first round of the fund.

"Great sporting contests are at the beating heart of regional communities and we want to see them played out on the facilities our communities deserve," Mr Toole said.

"This extra $1 million in funding will allow for two sporting fields to be re-surfaced, including improved drainage to enable water re-use, laser levelling and installation of new turf establishing Olympic Park as a premier sporting precinct."

Upper Hunter MP Dave Layzell said the funding was a welcome boost for community sport in Muswellbrook and the wider region.

"This combined injection of more than $2.6 million from the state government is helping transform facilities at Olympic Park and helping council and local sporting clubs realise their vision for a modern sports facility," Mr Layzell said.

"We know people in Muswellbrook love rugby league, we know people in the Hunter Valley love rugby league.

"This facility will be top notch, it'll be one of the best facilities between Maitland and Tamworth and the idea is that we can bring clubs here to play because it's more than just sport, it's about tourism as well."

Muswellbrook Shire Council Mayor Steve Reynolds welcomed the funding announcement said developing Olympic Park to a regional standard would benefit young people in the town.

"For core infrastructure we do rely on, in this area, these funding grants," Cr Reynolds said.

"In developing this precinct... this will enable female participation in sport throughout our area to increase."

Sydney Roosters player Brydie Parker, who grew up in Muswellbrook, said the improved facility was something the community had needed for a long time.

"It's so exciting for the community that this facility here is going to be top notch gold standard," Ms Parker said.

"I know for myself being a local here and being down the park nearly every day growing up, to have a multi-million dollar venue is just phenomenal.

"To see the growth in women's sport in this area, in particular within the rugby league space, is just something that was never there growing up for me."

Mr Toole said he believed when finished, the standard of the Olympic Park facility would attract trial games from NRL and NRLW teams.

"When you build these facilities to those standards that actually attracts NRL teams to want to go out into the bush and play in these areas."