The Dubbo RSL Club will establish a new licensed club at Kewsick Estate as part of an "innovative" land swap arrangement with Dubbo Regional Council.
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The 3.3 hectare site will include sporting facilities including cricket and football fields, plus tennis courts.
In exchange, the Dubbo RSL is giving council the Dubbo City Bowling Club site.
The agreement for the swap was signed on Tuesday afternoon after about 18 months of negotiations between the organisations.
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Dubbo RSL Club president Jeff Caldbeck said it was a "win-win" agreement.
It's the first time the RSL has undertaken a land swap.
"What prompted it is the development of Dubbo and our confidence that council and the Dubbo community is continuing to provide great facilities for the people who live here. I just think everyone should move here," Mr Caldbeck said.
The president said he was looking forward to the construction of a brand new, modern club house at Keswick that "won't have roofs that leak".
As for the sporting fields, Mr Caldbeck said due to the size of the land, it made sense to include them. He's hoping they could be used for Group 11 rugby league matches or for an NRL game.
Dubbo RSL Club manager Gus Lico said after rezoning the land, submitting a development application to council and everything else that need to be done, he expected it would be 18 months to two years before the facilities were finished.
"I hope [the public are] ecstatic, we certainly are. It's a great opportunity. It's great for the Dubbo community," Mr Lico said.
To allow council to use their new land, the Dubbo City Bowling Club will be moved to the Sporties site, Mr Caldback said.
The club house and greens at Sporties will be renovated, one of the greens will be turned into a car park and synthetic grass will be installed for the other renovated greens.
The club will likely also be renamed.
When the work is completed, Dubbo RSL's portfolio will include the main club, the renovated Sporties site, the Keswick club and Rhino Lodge.
And Mr Calbeck didn't rule out further expansion.
Council's plans are more flexible.
The new parcel of land ties in with Victoria Park and the Western Plains Cultural Centre.
"We wanted to do something that that precinct that the Dubbo community could be proud of. What we do there at the moment we don't exactly know," mayor Ben Shields said.
"We're leaving that largely to community consultation over the coming years. At the moment, anything is possible but we'll be largely guided by what the community tells us to do with that site. The one thing we do know is that we need more room."
Cr Shields said the site was ideal thanks to its proximity to accommodation, open spaces and the central business district.