In a confidential session at Tuesday night's council meeting, Kiama councillors accepted a tender for $265,485 from Pan Civil to undertake the stabilisation and restoration works.

The Kiama arch was officially unveiled on April 25, 1925, by then NSW premier Sir George Fuller, who was born in Kiama.

Concerns about the tilting arch were raised by the Kiama-Jamberoo RSL sub-branch in 2012, but the lean has been traced back to 1953.

Kiama council said that despite a lean of two degrees, the 200-tonne structure was "sound and intact".

However, investigations identified that the arch was built on uncontrolled fill, about six metres deep, in an area that used to be Kiama's tip.

The council had asked for $100,000 from the federal government but was given only $16,500.

The council also asked the state government for $77,200, but was given $30,000.

Kiama Mayor Brian Petschler said council staff would again speak to federal and state MPs, asking for an increase in government contributions.

"It's an iconic and key part of our town, so we think it's important that we make sure it's maintained for future generations," he said.

"The problem is the unstable ground it is built on and, if there was some change, it could potentially come down."