The ACT government will begin building a park and pavilion beside the lake off Commonwealth Avenue this year as the first stage of its City to the Lake project that will ultimately see high rises, a reclamation and a swimming pool in the West Basin.
ACT Chief Minister Andrew Barr announced $10.1 million in Tuesday's budget to build the park, as well as two new intersections on to Commonwealth Avenue and a pavilion for a cafe or "tourist facility".
He did not say when commercial and residential development would begin.
The government has previously said the first block would be released to the market this year, but Mr Barr refused to confirm the plan on Friday, saying the land release would be "in a number of years' time".
The swimming pool, which incorporates a "beach" and quarantined section of lake for swimming, was "in our thinking for the next parliamentary term", he said, with stages of the City to the Lake project delivered in each budget to come.
"Our approach to development in West Basin is different," he said. "We're seeking to get public access into the space first up, so the public infrastructure, the parks the activity nodes, the event precincts are being developed first .. and there will be the subsequent commercial and development in future stages."
Land sales on the lakefront would yield significant revenue which would be reinvested in the project, he said.
The park is being developed in the triangle of land directly beside Commonwealth Avenue near the underpass through to Regatta Point, with construction beginning this year and to be finished in 2016.
When it decided to fund the Fluffy buyback and demolition last year, the government pushed back parts of the City to the Lake project. Mr Barr said on Friday that while the new stadium and convention centre, together costing $700 million, had been pushed back, smaller parts of the project, "in the tens of millions of dollars", were going ahead as planned.
The government was putting in a bid to Infrastructure Australia for funding for the lowering of Parkes Way, with final decisions yet to be made on whether the road would be fully covered or partially covered by the new access road from the city to be built over the top. The project also includes reclamation of part of the lake to soften the curve, and a boardwalk over the water.
National Capital Authority chief executive Malcolm Snow, who expects a works application soon from the ACT for the new lakeside part and two signalled intersections on Commonwealth Avenue, said the authority had been clear about the building design in later stages, wanting to see "human-scale buildings", control of building heights, and generous setbacks from public open space.
"Managing heights will be important, but we will still be able to achieve the kind of mixed-use, vibrant kind of precinct. We've got a taste of that in New Acton and we would like to see more of that kind of character," he said.
Public open space was critical for success, he said, supporting "the elimination of asphalt and its replacement with grass and trees".
The authority had proposed the West Basin development nearly a decade ago and was delighted it was close to realisation.
"This will be a critical project for Canberra's future," he said. "It is a city-shaping, transformational idea. That's why we are supportive of it, it's why we have been working very closely with the Land Development Agency and its officers to make sure this addition to Canberra's landscape is a very high quality addition."
Asked about the boat and bike hire businesses currently in West Basin, Mr Barr said there would be opportunities for them to take up new tenancies in the precinct or negotiate a payout of their leases.