A plan to transform the fun park next year into a world-class amusement park and tourist destination fit for the 21st century was unveiled on Tuesday.

The upgrade will include nine new rides, with six new children's rides, a thrill ride, a family roller coaster as well as The Big Dipper - which will be the first inline seating launch rollercoaster in the world.

This state-of-the-art "one-seat wide" train is smaller than the previous Big Dipper at Luna Park, to limit the impact on neighbours.

Tourism Minister Stuart Ayres said every ride and attraction would comply with regulations relating to noise, height, lights, and hours of operation that had been in place since 2004.

The investment will create more than 2500 direct and indirect jobs during construction, boost tourism, and help in the economic recovery of NSW post-COVID-19, he said.

"This investment will attract more people to Sydney and ensure that Luna Park continues providing joy and excitement to millions of families and children for the next 85 years and beyond," he said on Tuesday.

"It is yet another sign of confidence in NSW and our economic future - and a sign of confidence that Sydney is back in business."

Luna Park managing director Peter Hearne said the upgrade would respect the heritage and history of the much-loved Sydney destination.

"We are just going to make it even better than it is now, while still preserving its wonderful heritage," he said.

The park will close for renovations on January 27 and re-open in mid-June.

Australian Associated Press