The rights to host the 2026 event were awarded to regional Victoria last year after Birmingham replaced South Africa’s Durban as host of the 2022 games.

But on Tuesday Premier Daniel Andrews announced his government would no longer support the games because it was clear the cost would exceed $6 billion.

“Frankly, $6 billion to $7 billion for a 12 day sporting event, we are not doing that – that does not represent value for money, that is all costs and no benefit,” he said.

The Victorian government set aside $2.6b for the event, with Geelong, Bendigo, Ballarat and Gippsland slated to host their own athletes’ villages and sports programs.

Treasurer Tim Pallas had been seeking a dollar-for-dollar matching contribution from the federal government.

While Victoria will no longer host the games, the legacy infrastructure from them will still be built.

There will be $1b spent on more than 1300 new social and affordable housing homes across regional Victoria, $150 million will be spent on tourism and events and all of the permanent and upgraded sporting facilities planned will go ahead.

Regional Victoria became the only bidder for the games after Durban in South Africa lost the 2022 event and the original 2026 host city Birmingham had to step in for last year’s competition.

Meetings were held with Commonwealth Games leadership in London on Monday night Australian time and will continue through Tuesday.