The strategy, which replaces the last one from 2012, puts the emphasis firmly on urban infill rather than expansion, saying 70 per cent of new homes will come from infill.

The document, to be released on Wednesday, says there is potential for only 29,000 new homes in existing greenfields areas.

The strategy makes a powerful case for greater urban density in the ACT, saying "decisions about future greenfields development on Canberra's urban fringes will need to be carefully weighed up" to protect the environment around the city, including bushland and grasslands.

"Infrastructure for greenfield development is estimated to be many times more expensive than for infill development," the strategy says. "Because infill development can use existing infrastructure, it requires significantly less infrastructure investment per capita."

The anticipated shift toward higher urban density is based on the trend towards smaller households (down from 2.9 people per household in 1991 to 2.5 in 2016, with single-person households the fastest growing component) and the need to lower greenhouse gases which result when the population extends beyond the reach of public transport networks, increasing reliance on private cars.

From 2015 to 2017, the ACT government was quietly buying farms to set aside for future development along the ACT's so-called "western edge", south-west of the new Ginninderry joint venture development area and hugging the southern flow route of Murrumbidgee River.

This western edge area is earmarked as an "investigation area" in the new strategy.

It refers to "an area to the west of the city beyond the Weston Creek and Molonglo districts" as a possible location for future urban expansion.

It says this area appears to have few significant environmental and infrastructure constraints and is close to existing urban areas, providing good access to facilities, services and employment. The area was originally identified for further study in the 2012 strategy, and the 2018 strategy has further refined the location boundary. Investigations will now begin to provide clarity about its future use, including any role in urban expansion.

The strategy removes western Murrumbidgee, western Greenway in Tuggeranong, central Molonglo and other areas from development "due to the complexity of environmental, landscape and community values".

It discounts the Kowen Plateau, beyond the airport, "due to significant infrastructure and sustainability considerations associated with the distance from urban Canberra".

The airport and environmentally significant areas which surround it prevent development to the east. To the south, bushland and mountains offer limited options, while the border with NSW restricts growth to the north.

Land supply is expected to be exhausted in Gungahlin by 2021-22, other than unit development in the town centre, and in Molonglo by 2030-31, the strategy says.

However, the NSW side of the Ginninderry development and the CSIRO development near the Barton Highway could extend the supply.

The strategic direction identifies, albeit without detail, an active new light rail corridor which extends around State Circle and along Adelaide Avenue into Woden. It describes the land either side of Adelaide Avenue as a "land use investigation area".

The government will look at allowing dual occupancy in the main residential zone, RZ1, and will allow higher-density development in "clearly defined locations" so people can age in place without having to move suburbs when they sell the family home, and to accommodate smaller households and a "range of affordability".

The strategy highlights the mismatch between jobs and population.

Canberra's inner north has 53 per cent of the jobs, but only 20 per cent of the population. Conversely, Tuggeranong has 8 per cent of the jobs but 20 per cent of the population.

Sites for urban infill will be determined partly by key transport routes. The strategy identified this ease of access as an average 10-minute walk (800 metres) to a frequent bus network corridor, an average 10-minute walk to a light rail stop, an average 15-minute walk (1 kilometre) to a city or town centre, and/or an average 10-minute walk to a group centre.

Chief Minister Andrew Barr foreshadowed the strategy's release this week, saying "you can't sprawl outwards forever".

"There is a simple reality that if we keep growing outwards the way we have in the past, this urban sprawl will significantly - and I mean significantly - eat into the unique bush and grassland environments that surround our city. This will happen in the next couple of decades," he said on Monday.