Over the last two weeks, contractors from Shepparton have been digging up the centre of the track as the first stage of the racing precinct's $3.5 million upgrades gets under way.

The new precinct, expected to be completed by September, will continue to run as a thoroughbred facility but will also double as the home of the Nyah Harness Racing Club.

"At the moment we've got two sand scrapers on site, and their job will be to remove grass and top soil where the new track is going to be," Murray Mallee Racing CEO, Aaron Garvie said.

Tenders for the track's new community hub building have now closed, and initial drainage works around the site will take place in the next couple of weeks.

A new dam will be built which will store excess water that is captured at the course, allowing for the precinct to be more environmentally friendly.

With Swan Hill's major racing event about four months away, Mr Garvie said spectators would get a better look at the new track by the time the June carnival rolls around.

"The expectation is that there will be a harness track in the middle. Post the carnival, we'll start doing the electrical side of the works, which involves putting in the lights," he said.

As the new 1040 metre harness racing course will be inside the existing thoroughbred track, movable finishing posts will ensure spectators get the best view possible.

The $3.5 million project has been jointly funded by the Victorian State Government and Harness Racing Victoria, and was announced in Swan Hill by racing minister Denis Napthine in April last year.