Sydney is bidding to take the Australian Open tennis away from its long-time Melbourne home, reports said on Saturday.

Melbourne has staged the year's opening grand slam at its Melbourne Park complex since 1988 and drew a record number of 605 735 fans to the fortnight tournament last January.

But Melbourne is being challenged for its grand slam status by Shanghai, Dubai and now Sydney when its contract expires in 2016, according to reports.

The Sydney Morning Herald said Sydney's pitch for the Open tournament included a plan to build a multi-million-dollar stadium at an inner-city harbour site.

Events NSW's chief executive Geoff Parmenter has confirmed Sydney's interest in the event, which is worth more than $100-million (US$69-million) to the economy of the state of Victoria.

"The Australian Open tennis is arguably the best annual event in Australia. I think any events company in the country would be negligent if they didn't have it somewhere on their radar," Parmenter told the Herald.

"The Glebe Island site is the subject of quite a bit of interest because it is pretty much the last clear piece of prime (Sydney) harbourside real estate left."

Parmenter denied there had been a formal application to host the Australian Open, but he confirmed to the newspaper that discussions had been held with Tennis Australia about the future of the tournament beyond 2016.

"We have talked to some people down there over the last few months. Yes, we've talked to Tennis Australia about the Open," he said.

Tennis Australia's chief executive Steve Wood confirmed Sydney's interest in the Open.

"We completely understand their interest in our event. The bigger and better the Australian Open in Melbourne becomes, the more attractive it becomes to other major cities around the world," Wood said.

Victoria's Tourism and Major Events Minister Tim Holding said he doubted whether the New South Wales government could afford to pay for the Open.

Victorian Premier John Brumby met Tennis Australia representatives this week to discuss the future of the event in Victoria, including a multi-million-dollar overhaul of Melbourne Park, the Herald said.

The facilities have fallen behind other Grand Slam tournaments and need an urgent upgrade.

Wood also downplayed the likelihood of Sydney's success in taking the event from Melbourne, saying the talks with Brumby this week were "very promising".

A Victorian government source told the Herald that Dubai presented the greatest threat after recently poaching Mark Peters, the former chairman of the Australian Sports Commission.

AFP