The ACT Government is giving a wary response to the plan to investigate residential development west of Tuggeranong.
It does not rule in or rule out the proposal, but suggests there are challenges for the plan.
The National Capital Authority will investigate the potential urban development of the West Tuggeranong area after being called to prepare a business case and report by ACT Senator Zed Seselja and Assistant Minister for Infrastructure and Regional Development Jamie Briggs.
Newly-installed Planning Minister Mick Gentleman, said the government was already working on land releases, but in other areas.
"The ACT Government is focusing on working within the 2013 Planning Strategy in relation to land release," he said on Wednesday.
"This includes urban town infill, like SouthQuay in Tuggeranong and existing identified Greenfield areas such as Molonglo.
"I would be more than happy to meet with the National Capital Authority in my capacity as Planning Minister to talk about this potential new land development west of the Hyperdome.
"There are many challenges with moving development over the Murrumbidgee River, and I would expect a full and detailed community consultation before the ACT varied the Territory Plan."
The National Capital Authority will develop a business case and a detailed report outlining any issues that may impact the suitability of the West Murrumbidgee region for urban development.
Urban development of West Tuggeranong was considered by the National Capital Development Commission in the 1970s, but the proposal was set aside and hasn't been seriously considered since.
Senator Seselja said it was important for the government to look at all options for development in Tuggeranong so Canberra can continue to prosper in the future.
"Having the NCA look at this possible development is an important step forward and I encourage Canberrans to get involved in the consultation process,” he said.
Ministers Briggs said the report would determine if the previous environmental and infrastructure concerns related to the development of the area were still relevant today.
“As part of its analysis, the NCA will consult with the ACT Government and other interested stakeholders and prepare a report outlining the issues that affect the suitability of West Murrumbidgee for urban development," he said.
“The NCA’s report will help determine if the previous environmental and infrastructure provision concerns relating to the development of West Murrumbidgee are still relevant today”.
An amendment to the National Capital Plan and a variation to the Territory Plan would be required before any new urban development could proceed at West Murrumbidgee.
Such an amendment would involve changing the land use policy from rural and open space zonings, to urban zonings.