The Australian Grand Prix will remain on the streets of Melbourne's Albert Park for another seven years, after the venue agreed terms with Formula One Management.

State premier Daniel Andrews joined minister for sport, tourism and major events John Eren to announce the extension, which keeps one of Australia's most recognised sporting events in Victoria despite ongoing opposition from residents and environmental groups.

Melbourne has traditionally staged the first race on the F1 calendar and renewing the event's contract comes at a time when Red Bull Racing's Daniel Ricciardo is prolonging Australia's legacy in the wake of Mark Webber's lengthy career i the top flight.

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"We are very happy to extend our relationship with Melbourne, who continue to set the standard for F1 events globally," F1 ringmaster Bernie Ecclestone commented, "This new agreement will take the city past 25 consecutive years of hosting F1, a super achievement."

The announcement is also a slap in the face for Sydney, which had hoped to land the event, particularly as Victoria state taxpayers continue to complain about the cost of hosting the F1 circus.

The recent New South Wales state election campaign saw the acquisition of the grand prix thrown in amongst candidate pledges, but the Andrew administration has now put an end to that, even if the new deal continues to keep the Victorian electorate in the dark as to the exact cost of staging the blue riband event. According to the local Melbourne Age newspaper, the 2014 Australian Grand Prix, at nearly $60m, cost $9.3m more than the 2013 event, in part due to falling ticket sales and increased costs.

"There's nothing quite like the Australian Grand Prix in Melbourne and the buzz it creates around our state," insisted premier Andrews, who maintained that the cost of hosting F1 would not be revealed, "It attracts visitors to Victoria from all over the globe, and shows the world we have the best of everything."

"Our competitors interstate have made no secret of their desire to steal it, but it is here to stay. I can assure Victorians that Daniel Ricciardo won't be racing over the Sydney Harbour Bridge any time soon!"