The ACT government will push ahead with a controversial plan to use part of the Magistrates Court car park as a construction compound for the light rail project.
Capital Metro Minister Simon Corbell announced on Friday that up to half the car park on the corner of London Circuit and Northbourne Avenue would be lost to the compound for the tram line, resulting in the loss of about 70 parking spaces.
An additional 90 spaces will be added to the neighbouring Canberra Theatre car park, bringing an overall increase of 20 spaces across the two sites.
Local traders and the the ACT Property Council criticised the plan to close the car park when it was first announced last year. The government would not go ahead with an alternative option of building a multi-storey car park on the site, which would have created 40 additional spaces.
Mr Corbell said the plan would limit disruption to local businesses and was a cost-effective option.
The reconfiguration process would take about six months and would be staged to limit the impact on available parking. Construction of light rail is due to begin in the second half of 2016.
The compound would not be required for the full three-year construction period. How long it lasted and when the reconfiguration began would be determined by the consortium chosen in coming months. Work on the car parks and the construction compound would require a works approval from the National Capital Authority.
Mr Corbell said the government was "very close" to choosing its preferred bidder from two international consortiums for the project.
"We've been consulting very closely with businesses throughout this process and Capital Metro Agency has been out talking to businesses and other stakeholders," Mr Corbell said.
"Overall the response has been very positive because we have been able to maintain the overall level of carparking, albeit with some adjustment between the two sites. Clearly, I accept that not everyone will be happy, but the changes are necessary for a period of time."
Reconfiguration of the Magistrates Court car park would allow for about 200 parking spaces, down from about 270 now.
Business owners and traders' groups have warned some Sydney and Melbourne Building tenants would suffer due to reduced parking and disruption. The plan comes after the government moved last year to increase parking fees in the city and extend paid parking until 10.30pm on some sites.