The current lights are being replaced through the federal government's Drought Communities Program, in partnership with Gunnedah Shire Council.

Gunnedah mayor Jamie Chaffey announced the good news on Tuesday with deputy mayor Rob Hooke, tennis coach Craig Louis and Gunnedah Tennis Club's Robert White.

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Mr White said the old halogen lights were "starting to fail" and were expensive to replace as a large crane was needed to reach them, so he was grateful for the funding.

"We're going to get lights which are much more energy-efficient and presumably will last a whole lot longer without any further attention," he said.

"This is a sport-mad town, tennis has a high profile, so this can only help keep it there."

Cr Chaffey said the upgrade would be a major benefit to "not only tennis in Gunnedah, but the entire region", and that the installation was being conducted through the use of a Gunnedah crane company.

"We're seeing this great outcome supporting local people, local goods and services," he said.

"It's great with tough times like drought, COVID-19 and other stress on our community, this Commonwealth money [is] coming in to our community."

It's part of 14 other Gunnedah projects funded through the Drought Communities Program.