The Barr government is considering raising London Circuit to increase the amount of developable land in the heart of Canberra.
The ramp from London Circuit to Commonwealth Avenue could also be an alternate route for the second stage of light rail, documents show.
The ACT government's City Renewal Authority has called for planning and engineering tenders to devise an estate-development plan for the City Hill precinct, or Section 63 City.
The land, which is largely car parks, wraps around the western side of Vernon Circle, and includes a clover-leaf ramp to Commonwealth Avenue from London Circuit.
It was foreshadowed for release in last year's budget papers, and follows the planned redevelopment of another part of Section 63, privately owned by developer Barry Morris, where up to 1200 apartments could be built.
The tender calls for engineering design for an estimated 900 to 1000 dwellings.
It references the Indicative Land Release Program, which flagged the release of 350 dwellings in 2019-2020, 350 dwellings in 2020-21, and 350 dwellings in 2021-22 in the area.
The government wants to lodge the estate development plan by August 2019 and gain works approval by November 2019.
The plan is supposed to "[promote] the value of place making and the role it plays in stimulating the public realm".
The Section 63 development must create a "uniquely Canberra look and feel" with high-quality public spaces, "appropriate" pedestrian connectivity, and "economically sustainable, active" street frontages, the tender said.
"In partnership with the community, we are creating a vibrant and vital city heart through the delivery of a design-led, people-focused urban renewal with a commitment to social and environmental sustainability," the documents read.
But the documents also reference a City Renewal Authority business case to raise London Circuit to meet Commonwealth Avenue.
The redesigned junction would "provide an alternative design option for the Canberra City to Woden light rail pathway, plus form up the boundary of Section 63 and surrounding lots, increasing the developable land area and providing an improved shape and street frontage", the tender states.
City Renewal Authority chief executive Malcolm Snow said the new at-grade intersection with Commonwealth Avenue would be achieved by reconstructing a section of London Circuit to rise up to meet the arterial road, and removing the existing bridge-underpass.
"The authority believes there are a number of significant urban design benefits to having an at-grade intersection, including the ability to create active street frontages on both London Circuit and Commonwealth Avenue, with improved connectivity between the adjacent future development sites," Mr Snow said.
"Raising London Circuit not only improves the urban-design outcomes of the adjacent development sites but reduces the amount of land that is utilised for future light rail, which maximises land for public and private realm.
"Creation of an at-grade intersection would enable the alignment of the proposed City to Woden light rail to remain within the road reserve rather than excising developable land on the western verge of London Circuit. It would also improve access for pedestrians and cyclists between the city centre and Lake Burley Griffin."
Mr Snow said the business case would be considered as part of the 2019-20 budget process.
The territory government has been mulling the redevelopment of Section 63 and the removal of the clover leaf for at least a decade.
Declassified cabinet documents from 2007 obtained by The Canberra Times show government was even considering a north-south tunnel underneath City Hill as part of a proposed redevelopment.
However, while the tunnel would significantly improve City Hill's pedestrian accessibility, it would be achieved "at a very high capital cost, approximately $150 million".
The tunnel would also require the removal of the trees and vegetation as it would likely be "cut and cover" like those near Acton and Parliament House. Ultimately, the idea was dismissed.