The ACT government said on Tuesday it had officially gazetted the new Molonglo Valley suburb - recognition of the contribution Australia's 21st prime minister made to the national capital.

Plans to name a suburb after the Labor legend were first announced on the eve of the 40th anniversary of his dismissal from government in 2015

Serving as prime minister from December 1972 until November 1975, Mr Whitlam died in October 2014, aged 98.

He gave permission for his name to be used for a future Canberra suburb in 2010, joining more than half of Australia's prime ministers.

Located in the Molonglo Valley stage 3 subdivision, Whitlam will have views to the Molonglo River and the Brindabella Ranges.

The government has begun planning for capital works, including water, roads and traffic infrastructure, to have the area ready for the start of construction by late 2018.

About 500 dwelling sites will be released for sale in the 2018-19 financial year and the first residents are expected in the area by 2020.

ACT government regulations for place naming require a prime minister or public figure to have been dead for a year before a suburb can be named after them.

Mr Whitlam's father, Frederick Whitlam, brought his family to the fledgling national capital in 1926, when he took on the role of deputy commonwealth crown solicitor.

The future prime minister lived in a family home in Forrest and was enrolled at Telopea Park Intermediate High School in 1927, completing the leaving certificate in 1931.

He later studied at Canberra Grammar School before enrolling at the University of Sydney in 1935.

Mr Whitlam lived at The Lodge from 1972 until then governor-general Sir John Kerr removed him from office on November 11, 1975.

ACT Housing and Suburban Development Minister Yvette Berry said the name "Whitlam" became official this week.

"Gough Whitlam was a one-of-a-kind man and prime minister, who helped Australia re-think the way we approach ideas relating to inequality and social justice," Ms Berry said.

"It is fitting he is being honoured in this way."

Planning and Land Management Minister Mick Gentleman said the ACT government's place names committee had recommended the name, as acknowledgement of Mr Whitlam's contribution to Australia.

"I had the honour of attending Mr Whitlam's dismissal speech at Old Parliament house in 1975, it was a moving experience for a 20 year old and for the whole nation," he said.

"It is an honour to be able to commemorate a significant Australian for our city and mark his legacy in this way."

Canberra suburbs already named after former prime ministers include Barton, Deakin, Watson, Reid, Fisher, Cook, Hughes, Bruce, Scullin, Lyons, Page, Curtin, Fadden, Forde, Chifley and Holt.

Australia's longest serving prime minister, Sir Robert Menzies, chose not to have a Canberra suburb named after him, reportedly telling his daughter Heather Henderson that "all the good suburbs were already taken".

A NSW federal electorate was named for Mr Whitlam in 2016.