Leeds City Council released images of the proposed arena last month
A rescue plan for the Leeds Arena has been announced after the government refused to approve the use of public money for the project.
Leeds City Council said the £78m arena was its "number one priority" and would open by 2012 as originally planned.
The Department for Business has refused to allow development agency Yorkshire Forward to invest £18m in the plans.
The council said it had come up with an "alternative funding mechanism", but would not reveal any further details.
The authority's executive board were asked to approve the funding plan during a private meeting on Wednesday.
The Department for Business (BIS) said the arena plan did not provide value for money, and urged the council and Yorkshire Forward to revise the proposals.
The council said it would work with Yorkshire Forward and BIS "to resolve this issue".
A spokesman said: "While the detail of the alternative funding mechanism will remain confidential until the government has come to a final decision on Yorkshire Forward's proposed funding mechanism, it will provide the citizens of Leeds with an assurance that the Leeds Arena can be developed irrespective of whether the government approves Yorkshire Forward's proposed funding package.
"The council is confident of Yorkshire Forward's continuing support and will be discussing its reserve plan to ensure that the current timetable is maintained."
Andrew Carter, the council's joint leader, said: "The development of an arena in Leeds is our number one priority and we are fully committed to bringing this ambition to life within the already published timetable.
"Whilst the government may wish to delay its own funding approval, we are confident that we have the ability to proceed, irrespective of the government's position on this matter."