Council is considering not renewing the lease of Wagga Airport in 2025, after repeatedly missing out on grants to improve facilities on a site it has to rent from the federal government.

General manager Peter Thompson says Wagga is in an unusual position because council has to rent and operate an airport it doesn't own, while most regional airports were gifted to their local governments many years ago.

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"It's an issue that should be on the table for the benefit of the community. We spend a lot of money out there. This year alone in the COVID environment, we'll lose about $3 million at the airport of public funds," he said.

"As you can appreciate, the state government's reluctant to provide grant funding to improve capital assets on land that's owned by the Commonwealth."

The Department of Defence owns Wagga Airport, where it also operates the RAAF Base, with a section leased to council on a 30-year agreement that expires in four years' time.

Mr Thompson said he would love to see the civilian part of the airport transferred to the wider community and didn't want to jeopardise the longevity of the RAAF presence in Wagga.

He said he spoke with Mr McCormack, who is also the minister for infrastructure, transport and regional development, about the possibility of not signing another lease when they met earlier this year to discuss council missing out on another round of grant funding.

"He's pointing us at other grant applications, and we will put in other grant applications," Mr Thompson said.

"At the moment, the funding that we have from the Commonwealth to put in the security screening won't build a passenger terminal that's large enough to take that security screening ... That's a ludicrous place to be."

When the airport issue was raised in the media in November 2019, Mr Thompson said council had been in "positive" and "continuing" discussions with Mr McCormack and Defence, but the issue remains unresolved more than a year later.

It comes after Monday's council meeting where councillors unanimously agreed to examine the commercial viability of handing control of the airport to the federal government when the lease expires.

Councillor Paul Funnell, who raised the issue in a notice of motion, said he was pleased with the outcome.

"I'm not saying we must hand it back, but we have to make an informed decision," he said.

Mr McCormack said he was keen to see the airport develop and would consider any proposal put to his office by council

"If the Council decides not to renew its lease on the airport, its future management will need to be considered as part of a wider review of the disposition of the Defence Estate in relation to the Government's recently released 2020 Defence Strategic Update and the 2020 Force Structure Plan," he said.

"The Wagga Airport is unique in that the local RAAF Base is intrinsically attached to the airport. Defence is such an important industry to the city and its economy and I want to see this strong relationship continue.

"I will work hard with Wagga mayor and general manager, Greg Conkey and Peter Thompson, along with the entire council to determine the best outcomes for all parties.