Tallinn Mayor Edgar Savisaar and Meelis Kiili, the head of the Kalev Sports Association, have signed a letter of intent to renovate the Kalev stadium and turn it into the Estonian National Stadium.
Savisaar said the area, which also features an indoor athletics ground and the Kalev basketball arena, will become one of the city's sporting and cultural hubs.
The initial agreement set a 2019 deadline for the completion of the work.
The stadium itself was opened in 1956 and is Estonia's largest stadium by capacity, holding 12,000 spectators. The A. Le Coq arena holds 10,000 and Kadriorg Stadium 5,000 spectators as the next biggest venues.
The stadium is home to football club JK Tallinna Kalev, which was relegated from the top flight at the end of the 2014 season. The stadium also hosts the dancing part of the song and dance festivals.
Editor: J.M. Laats