Organisers of the Tokyo 2020 Olympics will reject the chance to host volleyball in an existing facility and build a new venue despite it adding to the spiralling cost of the Games.

The development of the Ariake Arena was part of the original plans put forward to the International Olympic Committee (IOC), but the rising cost of hosting the event resulted in the organisers considering a facility in nearby Yokohama.

However, Japan’s Kyodo news agency reported that city governor Yuriko Koike will scrap the Yokohama Arena proposal and build the Ariake Arena, which has been designed by Japanese architecture studio Kume Sekkei.

Koike said she that following the 2020 Games, Ariake Arena could be used for other sports and cultural events, mirroring the kind of legacy created by London’s Queen Elizabeth Olympic Park – a centrepiece of the 2012 Games.

Plans will be submitted to a four-party working group – which includes the IOC – next Wednesday.

Games organisers are still hoping to keep the cost of the event below US$20bn (£16.1bn, €19.2bn), although this is still a large amount, even for hosting the Olympics.

Plans to use existing facilities for three venues will not go ahead, although some cost-cutting measures, such as trimming the number of seats in the swimming venue, will be employed.

Construction costs after the earthquake and tsunami that occurred in Japan five years ago are being cited as the reason for the increased cost of building venues.