The plan comes after much speculation over the last two years and as it had been hoped as recently as December last year that the Entertainment Centre would remain open for live performances.
This month alone the venue is set to host shows from Florence + The Machine, Seal and Jason Derulo. It was opened in 1983 and cost $42 million to build.
Industry body Live Performance Australia's Chief Executive Evelyn Richardson told theMusic.com.au's daily newsletter Your Daily SPA then that they had spoken to Infrastructure New South Wales, who are driving the project, and believed they were "committed" to live performance.
“The original concept design has been taken of the table,” Richardson said in December. “Our concerns initially were that [the proposal] was all about the exhibition and conference aspect, but now there's a recognition and commitment to live performance that certainly wasn't there before.”
However, on the same day that The Black Keys have announced their tour, which will visit the venue this October, the AAP reports that the 30-year-old Entertainment Centre will be knocked down in 2013 to make way for the new construction.
Instead the new exhibition and conference facilities will grow by two thirds to 20 hectares, and a "red-carpet premium entertainment facility" will be able to hold international entertainment.
Today O'Farrell said, "The project will mean a complete face lift for Darling Harbour - as well as the world-class facilities."
It is likely that contemporary music events will be held at Sydney Olympic Park's Allphones Arena moving forward and until the new precinct is opened, which is planned for 2016. Development is expected to start late 2013.
Mr O'Farrell's office has not responded to theMusic.com.au's request for further comment.
This week's new sets include the return of UK's Foals plus local acts Last Dinosaurs, The Snowdroppers and The Paper Kites.