The NSW government has sacked Port Macquarie-Hastings Council, after the cost of a $6 million cultural and entertainment centre blew out to $41 million.

Local Government Minister Paul Lynch acted on the recommendation of Public Inquiry Commissioner Frank Willan, who found the council constantly misled the community about the Port Macquarie Cultural and Entertainment Centre, or Glasshouse.

The administrator of Warringah Council, Dick Persson, has been appointed administrator.

Mr Lynch said there was no other alternative than to sack the council.

"The original estimate of the project was $6 to $7 million, the cost has now risen to $41.7 million, it's blown out by some six to seven times," he told reporters.

"What seems to have happened is that a reasonable community facility has been treated by the council as an icon which must be built come hell or high water, regardless of the cost to ratepayers."

The minister said there was no recommendation to take any action against specific councillors and it appeared to be more "incompetence" than anything untoward.

However, some matters would be referred to the Independent Commission Against Corruption (ICAC), Mr Lynch said.

"The council wasn't broke, but it's heading that way. The problem is you wouldn't trust them, they've been so irresponsible in what they've done so far," Mr Lynch said.

Mr Persson will have a full four-year term, with the next local government elections in the Port Macquarie to be held in September 2012.

The sacking is the latest problem in local government in NSW, with ICAC also currently investigating corruption allegations surrounding Wollongong Council.