The Sydney Cricket Ground will be upgraded to 48,000 capacity in a major $186 million refurbishment - involving three of its grandstands.

Renovations at the SCG are needed because the stadium "is looking tired" and "doesn't come up to scratch" compared with other grounds interstate, according to NSW Premier Barry O'Farrell.

Prime Minster Julia Gillard and Mr O'Farrell announced the $186 million upgrade to the Bradman, Noble and Messenger Stands prior to the start of the 100th Test match at the ground.

Ms Gillard said it was an "exciting day".

"This ground has wonderful history and we want to honour that history by making sure we preserve it but also making this ground ready for the future,'' she said.

"That does mean that three stands need redevelopment so that they can have better facilities for those who love their cricket and those who love their football.”

Mr O'Farrell said the SCG was "looking tired".

"I'm suggesting that frankly, when you compare parts of this ground now to other stadium around the country, it doesn't come up to scratch," he said.

"The facilities aren't up to scratch and what this $186 million will do is ensure this is a first class stadium again."

The upgrade will include the largest video screen at any Australian sports ground, a 700-seat dining room, three new bar areas and secure player facilities.

Capacity at the ground will be boosted from 45,000 to 48,000. There will be no columns in the new seating area to ensure sightlines are unaffected, and up to 85 per cent of seating will be under cover.

Demolition will begin in March, and renovations will be finished in time for the January 2014 Ashes Test match.

The NSW government will contribute $86 million to the project while the federal government and SCG Trust will contribute $50 million each.

The upgrade will make sure the heritage areas of the ground - Members Stand, Ladies Pavilion and Clock Tower remain intact.

Read more at the SCG website >>