The 2026 Commonwealth Games may not go ahead after Victoria withdrew as host, saying it was not prepared to spend as much as $7bn on "a 12-day sporting event".

In an announcement labelled by the Commonwealth Games Federation as "hugely disappointing", the Victorian premier, Daniel Andrews, said the cost of hosting the event had blown out from an earlier estimate of $2.6bn.

Andrews said his government would redirect the money to regional housing and sporting infrastructure.

"The Games will not proceed in Victoria in 2026," Andrews said.

"We have informed Commonwealth Games authorities of our decision to seek to terminate the contract, and to … not host the games."