The ACT government will push ahead with long-awaited plans for a new, privately owned city office block on the London Circuit car park next to the Legislative Assembly.
Previously priced at about $430 million, the government called for tenders for the development between the Assembly and Constitution Avenue in 2014 and last year shortlisted six firms to complete construction by late 2018.
Chief Minister Andrew Barr will today announce plans for the government to lease up to 20,000 square metres in the new building from private owners for directorate staff for up to 25 years.
The building could also include residential accommodation and other commercial spaces, and would be required to include underground parking.
"It is anticipated that the private sector will see this as a great opportunity to undertake a major development and potentially include apartments as well as commercial space on this site," Mr Barr said.
Another 20,000 square metres of offices will also be leased for directorate staff from across existing city building stocks. Existing government-owned office buildings in the city and on Northbourne Avenue are being sold to take advantage of 15 per cent asset sales bonuses payments on offer from the federal government with the funds going to the $783 million light rail project.
About 3800 public servants will be relocated by the government, including about 1700 across the city, 1000 in Dickson and 1100 in the Woden town centre, as announced last year.
As much as 13,000 square metres of office space will be leased in a new development on the Motor Vehicle Registry site in Dickson, along with up to 15,500 square metres in existing but untenanted buildings around the Woden town centre.
The new Dickson development could also include apartments and commercial space, sitting adjacent to a new light rail passenger stop and planned bus interchange. Expressions of interest and tender processes for the site are expected this year.
The outcome of a registration of interest process for the government to lease up to 15,500 square metres of currently unoccupied office space in Woden will be announced soon.
"The government will be taking up existing vacant stock in the city and this will begin immediately with the aim of moving additional ACT public servants into the city in the short term," Mr Barr said.
"This combination of a new building and the occupation of existing office stock will provide an opportunity for developers and for existing building owners. It will also lead to the revitalisation of Civic and will have positive outcomes for existing city business."
The government accommodation strategy includes the sale of major public buildings such as Northbourne's Macarthur House, Dame Pattie Menzies House and the Motor Vehicle Registry site in Dickson, and 1 Moore Street, as part of the Commonwealth government's asset recycling initiative.
"Today's announcement will help drive economic activity to the city centre during the working week. It will also support further job creation and growth in the CBD.
"The construction of office accommodation continues our efforts to supply a steady flow of infrastructure projects in the city, and many retailers in the city centre will benefit from a stronger trade from Monday to Friday."
Previous iterations of the city office block plan date back to 2010 and have included a ministerial wing to take pressure off the Assembly building, and a bridge across the government's executive car park. In 2014, the opposition dubbed the project "the Death Star II" and accused the government of seeking to hand "a sweetheart deal to Labor mates".
The government originally stipulated that any new public service office building should be within 10 minutes' walk of the Assembly.
Cbus Property, owned by the superannuation arm of the construction industry, confirmed its interest in August 2014 in building a new Canberra office. The project would have been the fund's first ACT investment.