The Margaret Court Arena at Melbourne Park is currently open to the elements
Melbourne Park is to undergo a radical £200m redevelopment in a bid to retain the Australian Open beyond 2016.
The Margaret Court Arena will be fitted with a retractable roof while 21 new courts, eight indoors, will be built.
The plans were unveiled after 26 matches were lost on Monday due to rain with play only completed on the covered Rod Laver and Hisense Arenas.
John Brumby, Victoria state governor, said: "This will give Melbourne the most weatherproof grand slam."
The future of Melbourne as the home of the Australian Open had come under threat in recent years.
The current contract expires in six years and China had been lobbying to host a grand slam of Asia/Pacific.
But Brumby is confident that the plans, which also include adding 1,500 seats to Margaret Court Arena, will ensure Melbourne keeps the tournament.
"This major redevelopment is the single biggest investment in the precinct since the Australian Open moved to Melbourne Park from Kooyong more than two decades ago. It will ensure Melbourne continues to lead the way as the world's best sports city," he said.
"The world's best players love coming to Melbourne and our significant investment in Melbourne Park will guarantee the Australian Open remains in Victoria until at least 2036."
Construction will begin at the end of this year's tournament and take about five years to complete.