Peak industry body ​Live Performance Australia (LPA​) has called on the NSW Government to save historic Sydney venue, Theatre Royal​.

A new push is being made to resolve the future of the CBD venue, which has remained closed since March 2016, following news for a new live performance venue as part of the Powerhouse Museum site development.

"This theatre is a very valuable part of our live performance infrastructure and to have it dark for more than two years now is severely limiting opportunities for our producers, performers and audiences," LPA Chief Executive, Evelyn Richardson, said.

"Sydney has fallen way behind Melbourne when it comes to live performance venue capacity which is not only bad for Sydney but also impacts on audiences around the rest of the country.

"The loss of the Theatre Royal has materially impacted the opportunity for Sydney to host major productions, depriving local performers and industry workers of jobs, limiting choice for audiences, and short-changing the visitor economy through lost visitation and economic activity generated by live performance."

The LPA is calling on the NSW Government to bring together the owners of the Theatre Royal site, City of Sydney and industry leaders to secure the venue's future.

"It doesn’t make any sense to have a perfectly good venue in the heart of the CBD sitting unused," Richardson said.

"Every day the Theatre Royal is closed is another missed opportunity for Sydney’s live performance industry and audiences and the Government should make reactivation of the site an immediate strategic priority for live performance in NSW."