The chief minister wants Canberra to become the nerve centre of Australian space research, infrastructure and exploration, centralised around the $50,000 Space Research and Innovation Hub at Mount Stromlo.

The move would attract and retain researchers in Canberra by "playing to our strengths", Mr Barr said.

"Canberra is fast becoming the knowledge capital of Australia," he said.

"One of every nine Canberrans are either working or studying at one of our tertiary education institutions.

"Becoming a hub of aeronautical research and development will allow Canberra to continue attracting and retaining researchers to our city – playing to our strengths and creating more jobs."

The territory already houses the Canberra Deep Space Communication Complex, the Advanced Instrumentation and Technology Centre and the EOS Laser Ranging Facility.

The ACT Government is collaborating with the Australian National University, UNSW Canberra and EOS Space Systems to "define and project Canberra's potential".

But will this new frontier of job creation prove to be just pie in the sky?

"We're not aiming to build a giant launch facility or send giant rockets into space. We're planning to send things the size of a couple of bread bins, each of them costing less than $1 million," director of the ANU Research School of Astronomy and Astrophysics, Professor Matthew Colless said.

"Australia needs to realise that the whole way that the space industry works is being disrupted by technological change as other industries are."

Professor Colless said the miniaturisation of satellite components and dwindling launch costs make it possible for even a relatively small economy like Australia to get into the space industry in a way that hasn't been possible in the past.

"Because of miniaturisation, we're able to do things like monitor water quality across the face of Australia, to measure the effect of climate change, to check on the quality of crops and of mining resources.

"These are things that Australia needs and which can be done now for relatively low costs but very high return," he said.

Canberra's confluence of government and influential intellectual organisations makes it an idea place for a space research "nucleus", around which public and private sector organisations with skin in the game could "condense".

"We think there's this cresting wave of technology which makes a complete sea change in how space economies work and we think it's time Australia got on the wave and started surfing that towards the future," Professor Colless said.