The proposed theatre would be modelled on major theatres across the country in the hope of attracting major productions like ballets, musicals and live music to Canberra.

A new Canberra theatre complex is one of the territory government's key infrastructure priorities.

The ageing Canberra Theatre Centre seats about 1200 people and was built in 1965.

As well as limited seating capacity, the current theatre poses technical constraints limiting the productions that can use the venue.

The preferred site of the proposed new theatre is bordered by Vernon Circle and is located behind the current theatre.

Consultant ARM Architecture won the contract to provide design and technical advice in the development of the business case for the new complex.

Details of the contract - including the price - have not yet been made public and were not immediately available on request.

Cultural Facilities Corporation chief executive Harriet Elvin told ACT Estimates hearings on Wednesday there was extensive work going on in the planning stages.

The hearing heard that iconic theatres across the country were being used as inspiration and guidance for the proposed new complex.

Ms Elvin said she was working closely with Arts ACT, the City Renewal Authority, Treasury and the new organisation Major Projects Canberra on the business case.

"We're in a very intensive part of the business case phase," she said. We just appointed consultants to undertake design aspects ... and also the commercial analysis. The consultants are meeting, doing site inspections and having consultations," she said.

She told the hearing the ACT politicians' car park was the preferred site but was not locked in.

"That work will come together by the end of this calendar year, so the outcomes of the business case, depending on what they are, can go into the next budget cycle," Ms Elvin said.

The current work to create a business case was funded through $1.2 million allocated in last year's territory budget.

Infrastructure funding has not yet been provided.

A previous proposal had considered moving Civic Library and developing the new theatre at the Mooseheads car park, adjacent to the current proposed site.

Canberra Liberals Giuilia Jones and Vicki Dunne both questioned whether the proposed site would be large enough for the project.

Ms Elvin said that was among a number of issues currently being explored.

"I guess it depends on what the exact limits of the site are," she said.

She said there were all sorts of options to be considered, including whether the current road alignment was kept.

"Or do you start dropping the road underneath providing underground access to stage doors?" Ms Elvin said.

She said the preliminary design works being done for the site would look at how the new theatre would integrate with other facilities, including the current theatre.

A main consideration would be making sure the new theatre's configuration was in line with current standards.

"Essentially it would need to be comparable to other major venues on the touring circuit. So that we can take shows from Sydney, from Melbourne from Adelaide. We can take major musicals and ballets and so forth," Ms Elvin said.

She said the future purpose of the old theatre was yet to be determined, but they had visited interstate venues which could provide models for its use.

Ms Elvin said ARM was considered perhaps the leading firm in Australia when it came to performing arts design.

"They would certainly be drawing on their own expertise ... looking at the state of the art facilities elsewhere in Australia," she said.