The battle to win the Winter Olympics is over for Sochi. Now the battle begins to build the venues. The city has seven years to completely transform itself into a world class centre for winter sports.

High spirits prevail in the Black Sea resort of Sochi. Russia has never hosted the Olympics as an independent country. The closest it came was during Soviet times when Moscow held the Summer Olympics in 1980.

Sochi's locals say it's about time their country played host, as Russia has a strong track record in winter sports.

As hundreds join in the festivities in Sochi, it's clear they are proud of their victory. It's been non-stop partying ever since the International Olympics Committee announced Sochi the winner on Thursday morning.

But now Russia faces the challenge of building the Olympic venues almost from scratch. The to-do list is long and the deadline tight. Most of the sports facilities and hotels are still in plans and the city's infrastructure needs major improvement.

Although Russia says seven years is ample time to realise its ambitious plans.

President Putin has guaranteed $US 12 BLN to transform Sochi and the surrounding area with private companies footing some of the bill. Russian President Vladimir Putin is establishing a special working group to oversee security at the games, and prevent misappropriation of funds.

“Today I singed a decree on the preparation of the 22nd Winter Olympics in Sochi. One of its articles states that it’s necessary to create secure conditions for guests and participants of the Games. I intend to assign the Prosecutor General’s Office with establishing a working group to ensure security of the Games and supervise construction of the facilities. The group will oversee that the resources are spent efficiently and at that no embezzlement occurs,” the President said.

State-controlled gas monopoly Gazprom is one of the major investors.

But the Government says all this funding isn't just for the Olympics but for life.

Russia wants to create a long-lasting legacy for the Sochi region, turning the Black Sea resort into a world-class sporting venue.