Chief Minister Andrew Barr on Friday said it was too early to say the site would be sold but did indicate one option was dismantling the village and dispersing its residents into smaller housing sites throughout the ACT. The review was being conducted by Housing ACT.

He was not ruling anything in or out but selling the land was an option.

"To have a smaller-scale of provision in a number of different locations is one potential model," Mr Barr said.

"Because one of the issues that is pretty clear from experience in Canberra and around the country and internationally is that if you have significant concentration of social disadvantage, of mental health issues, all in one spot, that can be very difficult to get the best outcomes for people and, of course, places a ... is a challenge for surrounding communities."

Housing director Louise Gilding in mid-2017 said the government had an agreement in place with Argyle Housing until June this year to manage Ainslie Village. It has an option to extend that agreement for another two years. A question has been put to Housing about whether the agreement will be extended or not and for how long.

Ainslie Village has been operating in Quick Street, Campbell for almost 40 years.

It has 172 rooms arranged in four, eight and 12-room residential houses. Two houses are reserved for women, and the balance for men.

Starting as a homeless service in the 1980s, the village is still home to many residents who entered via those services. Consequently, the tenant demographic may be characterised as "people with high and complex needs, the majority of whom are male," says operator Argyle Housing.

The future of the site has been under a cloud for some time, with The Canberra Times reporting in 2017 that residents were concerned the government had plans to move them out.

Similar reports stretch back to 2006.

A caller to ABC Radio Canberra on Friday asked Mr Barr if it was true that Ainslie Village was going to be sold.

"Ah, no. Certainly, the village itself and the care model is the subject of some consideration and review," Mr Barr said.

"I think there will always be a need in Canberra for that sort of quite significant supported accommodation with wrap-around care services and the like.

"Whether the model that Ainslie Village currently operates under is the right one for the future is something that is being looked at."

The Chief Minister said an alternative use of the land now occupied by Ainslie Village, at the base of Mount Ainslie near the Australian War Memorial, was part of the review.

"It's something that Housing are looking at. They haven't made a decision yet in that regard and it would be very premature to ... I'm not ruling things in or out but I think the thing I can absolutely rule in is that there will be a need for that kind of supported accommodation service, the question is under what sort of model," Mr Barr said.

ABC announcer Adam Shirley asked: "And where?"

"Possibly," Mr Barr answered.

"Or I guess in what size of service delivery model. How many? Whether in fact we might need more than one but to have a smaller-scale of provision in a number of different locations is one potential model," he said.

Mr Barr did not have a completion date for the review.

"It's not something that is going to happen quickly but clearly this is something Housing are looking at," he said.

The caller emphasised that she was proud that Canberra had Ainslie Village and that it looked after society's most vulnerable.

"Absolutely, and there's no question at all that we will continue to do that," Mr Barr said.

"The issue will be whether, in fact, we will need to expend service provision, where we might do that, what's the best model for that sort of provision and where it might best be located to.

"And where it might best be located to and I suspect it could be multiple sites in the future, particularly as the city grows."

The caller said any housing should be located close to services and public transport. Mr Barr said that was the issue at Ainslie Village, that it was not close to services. "It's quite a long walk [into Civic]," he said.

The caller said it would take 10 minutes. Mr Barr reckoned that was a long way for "a lot of people".