South Australian Premier Mike Rann has dealt an election trump card, gifting the AFL a newly redeveloped Adelaide Oval where cricket and Australian Rules football will co-habit.

Mr Rann, facing a state election on March 20 next year, on Tuesday announced the government will fund most of a planned $450 million redevelopment of the historic Adelaide Oval.

In a deal which ends a 40-year standoff between the state's cricket and football authorities, AFL games will be played at the oval in the city's heart. International cricket will also remain at the oval.

The agreement also effectively trumps the Liberal opposition, which last week unveiled an election pledge of a new $1 billion multi-sports stadium in the city.

The issue of whether to build or redevelop a sporting stadium had loomed large on both parties' election radar.

Mr Rann said the redeveloped Adelaide Oval, with a capacity of 50,000 spectators, will be completed within four years - if the federal government provides $100 million and local councils agree.

The redeveloped stadium will also ensure Adelaide is not overlooked to host soccer games should Australia be successful in a bid to host the 2018 or 2022 World Cup.

Mr Rann said the agreement was a "once off, once in a lifetime opportunity".

"This is a historic day in South Australian sport," Mr Rann said.

"Adelaide Oval is an icon of this city and this state.

"Rather than building yet another stadium at massive cost, the South Australian government will contribute significantly to this upgrade.

"We think this is going to be a fantastic development to bring life to the city.

"We have got more work to be done over the next six months, but what we have said as a government is that the $450 million commitment is there on the table for this development and nothing else."

Mr Rann said the government would seek a legally binding agreement for the Adelaide Oval site by July next year from the SA Cricket Association (SACA) and SA National Football League (SANFL), which owns the state's two AFL licences.

The SANFL had played games at Adelaide Oval since 1877, four years after the oval was built.

But the football body, angered by cricket's control of the arena, bitterly split from the oval and built its own football stadium at West Lakes, about 30km west of the city, which opened in 1974.

From then, the two bodies remained at odds and resisted any co-habitation discussions.

But AFL chief executive Andrew Demetriou played peacebroker last year, bringing the two SA organisations together and stressing a desire to play AFL games at Adelaide Oval.

The AFL boss said the announcement was a "day many believed wouldn't happen".

AAMI Stadium, which currently hosts all AFL games in Adelaide, will remain a venue for AFL preseason games.

The ground will also remain the headquarters and training base of the Adelaide Crows, and likely be used for AFL premiership season matches if Australia wins the right to host soccer's World Cup, given any Cup games would be played at Adelaide Oval.

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