The Barr government is likely to abandon plans to take the second stage of light rail past Old Parliament House, instead opting for a "compromise" route via State Circle.
ACT Chief Minister Andrew Barr made the announcement during a speech on Monday morning where he outlined the last two years in government and laid out his future priorities.
It follows a report from the Joint Standing Committee on the National Capital and External Territories in October, which warned of time delays and cost blowouts in getting the project approved if the government chose to send light rail to Woden via Barton.
At the time, Transport Minister Meegan Fitzharris said the government would nevertheless pursue the route, saying they'd always known it would take a more complicated approval process to get the project over the line.
But on Monday, Mr Barr said he would not allow "perfect to be the enemy of good" in getting the Civic to Woden route approved, and that the light rail would likely instead go via State Circle.
A final decision will be made after next year's federal election when the make-up of the new Parliament becomes clear.
"The federal parliamentary committee has given a pretty clear indication of the fast-track to approvals and we'll focus on that as we move through the next stage of the project," Mr Barr said.
"Obviously at the moment the priority is getting stage one operational but I'm fairly certain not long after that the community's attention will focus very clear on the next stages for the project given we are in the dying days of this current [federal] Parliament, we need to be ready as we move into a new Parliament after next year's election to get the project through the approval phase.
"The bipartisan committee has given a pretty clear steer on that question particularly as it relates to State Circle so we'll focus on that particular part of the route where they've given some pretty clear guidance in regards to the next steps for us."
Mr Barr said the State Circle route represented a compromise between the two options voted on by the public earlier this year and would be the "path of least resistance" in getting the project fast-tracked.
He said it would shave minutes of the journey from Civic to Woden, although there were "risks" involved with the placement of stops.
Parliament House architect Harold Guida told the parliamentary committee earlier this year the government had told him in a briefing a stop on the circle would require a lift to carry people up to Federation Mall between old and new Parliament House.
The station could have been underground, Mr Guida said, with talk of building a “parallel tunnel” to the State Circle tunnel, with the lift appearing on Federation Mall on the side of the road, in the area taken up with small parking spots.
However an ACT government spokeswoman said the Barton route was still a live -and preferred - option, based on extensive community consultation, technical analysis and discussions with a range of stakeholders, including the National Capital Authority.
Transport Canberra officials also told the committee earlier this year the government had chosen to take light rail through Parkes and Barton as it would pass more employment hubs and cultural institutions, meaning more people would use the system.
But Mr Barr said: "In the end there are inevitably compromises between the speed of the service and the amount of people you get a light rail stop close to."
The National Capital Authority confirmed the route would not require a change to the National Capital Plan although would still need a heritage impact assessment and consideration by the Department of Environment and Energy and the Parliament as well as meeting design quality, landscape, moral rights and safety requirements.
"The NCA will assess the new proposed route on the provision of the appropriate documentation," a spokeswoman said.
Woden Valley Community Council president Fiona Carrick welcomed the news, saying common sense had prevailed.
"While the Woden Valley Community Council does not have a position on whether light rail should be be built or not, should it we built we would prefer it to be a direct alignment. The direct alignment will provide better travel times than the dogleg will provide," Ms Carrick said.
Inner South Canberra Community Council chair Marea Fatseas said she could understand why the government came to that compromise, given the complexity of the Barton route and that she hoped to see a cost-benefit analysis for the route soon.
She also urged government to start work on an integrated transport and land use plan for the Civic to Woden corridor sooner rather than later to avoid the stage one scenario where the light rail project is almost complete but there is still no final City and Gateway Urban Design Framework.
"With the rapid densification of the inner south comes the need also for better public transport and active travel options," Ms Fatseas said.
ACT Property Council executive director Adina Cirson, who lobbied for a Capital Circle alignment, said developers who'd invested heavily in Woden would also welcome the alignment.
"The Property Council believes stage two needs to be done as quickly as possible to provide certainty to developers in the Woden town centre, but also so a north-south public transport connection is in place as soon as possible," Ms Cirson said.
"While we understand the importance of connecting Barton, we don't believe compromising the fastest way to Woden is the best way of doing that."
Ms Cirson also said the new route set up the possibility of using the Parliamentary Triangle as an interchange point to build future public transport between the area and Kingston, Manuka and Canberra Airport.
But Public Transport Association of Canberra Damien Haas labelled the announcement as "disappointing", saying the long term benefits of light rail would have been better realised with light rail deviating through Barton.
"We understand that this compromise is necessary for the light rail to get to Woden - and eventually Tuggeranong - but the proposal to travel through Barton's national institutions and workplaces had incredible potential to reduce car dependency, ease parking pressures and provide direct access to many national institutions by tourists and Canberrans working there," Mr Haas said.
"We agree this is the path of least resistance in attaining Commonwealth approvals for construction to occur, and trust this compromise is matched in spirit with a speedy approvals process to enable a business case to be prepared. We would like to see construction started as soon as possible."