The NSW government will provide $5.624 million to secure the funds required for the project to complete its second stage.

The money is "very much welcome" by the Gunnedah community, mayor Jamie Chaffey said.

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The initial stage was delivered by council in partnership with local contractors, but the project was set back by a budget blowout of more than $6 million.

The grant will mean stage two can get underway before Christmas, Cr Chaffey said.

A contractor will be mobilized to site and begin work around the main amenities block, canteen and kiosk area, the open space learning area, open aviaries and other animal enclosures.

"It's taking shape, and it's looking like a very significant piece of infrastructure for the Gunnedah community," Cr Chaffey said.

Stage three will include construction of the hospital rehabilitation facilities for koalas and other native animals.

"To make sure that we've got adequate state-of-the-art facilities to look after and care for native animals, like our endangered koalas," Cr Chaffey said.

The town is upgrading its airport tarmac to begin reintroducing commercial flights.

It's an opportunity to showcase Gunnedah to international attention, Cr Chaffey said.

"Once we get flights into Gunnedah, they'll able to come from all over the world to see our facility and the koalas," he said.

The mayor said an announcement on the operator for the facility will come in the near future.

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