Transport Minister Meegan Fitzharris announced the government’s preference on Thursday morning, which would rely on approval from the federal government before getting the green light.

The other option was to run the light rail track to Woden through Civic and via Parliament House.

“Light rail stage two has been going through a rigorous planning process that involves negotiation with the National Capital Authority and commonwealth government due to the heritage and national importance of the parliamentary triangle,” Ms Fitzharris said.

“What’s clear is that the ACT government is committed to extending light rail to Woden, and we will continue to work with relevant stakeholders on the exact alignment through the parliamentary triangle.”

The ACT government’s final business case for stage two of the project hinged on working through details of the route with relevant federal government authorities, Ms Fitzharris said.

“It’s not appropriate for the ACT Government to finalise the business case for the project until the NCA’s requirements and alignment details are worked through.

“We’re hopeful we can continue to progress these negotiations in good time so that we can get on with delivering a world-class public transport network for Canberra.”

In late 2017, following months of consultation and analysis, the ACT government narrowed down the possible routes the light rail will take south from the city from four to two.

Ms Fitzharris said at the time that community feedback revealed a need to place the light rail route near "as many of the key employment hubs and national institutions as possible in the parliamentary triangle".

Three-quarters of Canberrans surveyed supported a route via Barton.

"It would also be Canberra's first light rail route with a section that doesn't follow a current road," Ms Fitzharris said last year.

"This design option would allow the route to get through Barton more quickly while also servicing more employment hubs and our important national institutions and tourist attractions."

A popular light rail extension to the Canberra Hospital was dumped last year due to technical restraints.

Ms Fitzharris said she was confident the community would support the Barton and Parkes proposal.

“This route provides the best access through the Parliamentary zone to employment hubs, cultural institutions and other places of interest such as Manuka Oval,” she said.

“There is no question that the City to Woden stage will be the most difficult section of a city-wide network to design and build.

“Due to the location of the route, it’s heritage and national significance, it is also necessary for commonwealth government approvals to be obtained, including commonwealth parliamentary approval, and that is our focus right now.”