Rio 2016 have scrapped plans for a 4,000-seater floating grandstand at the Lagoa Rodrigo de Freitas rowing and canoe sprint venue ahead of this summer's Olympic and Paralympic Games, organisers have confirmed.
Seating has also been reduced by a undisclosed amount at the beach volleyball venue on Copacabana Bay.
Abandoning the floating grandstand will save between BRL R$15.9 million (£2.8 million/$4 million/€3.6 million) and BRL R$19.8 million (£3.4 million/$5 million/€4.5 million) from the budget, it is hoped.
But the decision is a major blow for the two sports due to be showcased at the venue, which is also facing criticism over high levels of water pollution.
International Rowing Federation (FISA) honorary President Denis Oswald has told insidethegames that they are "disappointed" at the decision.
"They had promised a lot at the venue," the official, who was replaced as President by Jean-Christophe Rolland in 2014, added when speaking here at the International Centre for Sports Studies (CIES) Symposium.
"The rowing venue has existed there for 50 years, it is very well located.
"We just wanted more seats."
Organisers have repeatedly insisted that the grandstand would be developed, with FISA executive director Matt Smith telling insidethegames last month how they "have been told on several occasions by top Rio 2016 people that the floating grandstand is not in question".
Video conferences are being held this week between the Organising Committee and FISA to discuss concerns.
International Canoe Federation (ICF) secretary general Simon Toulson also has a discussion with Rio 2016 scheduled for Friday.
The beach volleyball reduction, about which no precise details have yet been given, is another huge blow considering the sport is one of the most eagerly anticipated, both in Brazil and internationally.
Fears over Rio's budget are growing in the midst of the host nation's worst recession for 20 years.
It was announced in October that budgets will be cut by around 30 per cent, with infrastructure and the volunteer programme suggested as the main affected areas.
Both Rio and International Olympic Committee (IOC) officials insisted these cuts would only take place in "non-vital" areas based on an assessment.
"This is exactly the same as every Organising Committee, in talking about the final budget," claimed Gilbert Felli, the former IOC executive director for the Olympic Games who was retained as a senior adviser working specifically with Rio.
"In Vancouver and London, they tried to find ways to save money.
"You just have to ensure that increasing the efficiency of the budget doesn’t affect the work of the people, the athletes, coaches and media."
The floating grandstand, however, appeared a key part of the rowing and canoe sprint venue and will certainly lead to a loss of atmosphere and access to the Lagoa.
This latest cost-cutting measure was revealed by Rio 2016 director of communications Maria Andrada at the same time as he highlighted concerns over ticket sales for both the Olympics and Paralympics.
Only around 50 per cent of the 4.5 million Olympic tickets accessible for Brazilians have been sold.
Volunteer numbers were cut from 70,000 to 60,000 last year, with Andrada now revealing a further fall to just 50,000.
Numbers of cars have also been reduced by 20 percent to 4,000 from an original estimate of 5,000.
insidethegames has contacted FISA, the ICF and the International Volleyball Federation (FIVB) today for a reaction.