At the National Multicultural Festival on Sunday, an entire stage will be devoted to Chinese music and culture with about 500 performers expected to appear.

In the Chinese calendar, 2015 will be the year of the sheep, historically conferring intelligence and fashion-sense on children born in that year. Chinese New Year takes place on Thursday February.

Federation of Chinese Associations ACT coordinator Andrew Yan said Chinese new was the capital's most important festival, both in China and overseas.

"Every year we have the National Multicultural Festival but fortunately this year it's at the same time as Chinese new year," he said.

"So this year we will celebrate [them] at the same time," he said.

Australia-China Youth Cooperation president Robert Johnson said families came together annually to remember the year that had been and plan for the next one.

"I have memories of when I was a kid, many people were running around," he said.

"Whoever had the largest house, many people would come along and we'd watch the live TV broadcast from China Central Television."

Mr Yan's assistant Jenny Chen said a typical Chinese family would come together to eat dumplings and distribute red packets on New Years Eve.

"The senior family members will give out red packets, which are a metaphor for prosperity in the New Year," she said.

"Red packets usually come with money inside."

Performers from both Canberra and China will appear on stage two throughout Sunday as part of the celebrations for Chinese New Year.

Mr Yan said about 500 people would be performing between 10am and 6pm, including shows of traditional Chinese music as well as displays of gongfu and Peking Opera.

"[Tomorrow] Chinese communities will bunch up around that area, so if you walk down there from 9am tomorrow morning you'll feel like you're in China," Mr Johnson said.