Queensland State Premier David Crisafulli announced the move on Tuesday, as he unveiled the third venue plan for the Games.
Crisafulli said another 20,000-seat boutique stadium would be constructed at Brisbane Showgrounds, while some events have been moved out of the city to regional Queensland.
Brisbane's Queensland Tennis Centre will be upgraded with the addition of a new 3000-seat showcourt, while the Gabba ground will host cricket at the Games before being torn down.
The issue of venues has been a matter of much political conflict since the Games were awarded to Brisbane in 2021 and Crisafulli said organisers could now get started on constructing and refurbishing the various arenas.
"Finally, Queensland has a plan," Crisafulli said in Brisbane.
"The time has come to just get on with it. We will."
A $2.5 billion indoor arena and entertainment venue which was to have been paid for by the federal government will now be put out to private tender with the promised funds going to other infrastructure.
Crisafulli is likely to come under fire for the stadium plan as he went on the record opposing the construction of a new arena in the city in the run-up to the state elections that brought him to power last November.
"It's my decision," he added. "I wasn't prepared to take the politically easy option when the truth is that wouldn't be of benefit to the state.
"I believe in this plan and I think Queensland is going to back it."
Environmental lobby group Save Victoria Park picketed outside Crisafulli's announcement on Tuesday and issued an open letter last week saying any construction in the park for the Olympics would be an embarrassment for Brisbane.
"Do we really want to be known as the city that concretes over its historic parkland for a mega stadium?" said spokesperson Sue Bremner.
Another major reverse on venues looks unlikely, however, as Australian Olympic Committee (AOC) chief executive Matt Carroll has already warned that the plan needs to be in place by the end of June.
The AOC on Tuesday welcomed the announcement as a "very positive step towards delivering a successful Games".
BEST OF QUEENSLAND
Tuesday's announcement came on the back of a second review of the venue options undertaken by a seven-person panel, which reported earlier this month. The government said they had adopted over 90% of the panel's recommendations.
Queensland is nearly five times the size of Japan and Crisafulli said it was only fair that the whole state would take part in hosting the Games.
The rowing will now take place on a crocodile-infested river in Rockhampton some 600km to the north of Brisbane, while sailing events will be staged in the Whitsunday Islands near the Great Barrier Reef.
Brisbane organising committee chief Andrew Liveris said he had been in contact over the plans with Kirsty Coventry, who is the International Olympic Committee's point person for the Games and was elected as the new head of the Olympic movement last week.
"This is a go-get-it-done plan and this will be delivered," he said.
"Queensland gets the best of venues, the Games get the best of Queensland."
