It is opening a market sounding on Monday to gauge commercial interest in the design, construction and management of an eco-lodge at the site.

The proposed eco-lodge, which would require National Capital Authority approval, would be located adjacent to Dairy Farmer's Hill.

According to the tender documents, the facility would be sustainable boutique accommodation offering forest views and "embrace the story of the Arboretum".

It would be suited to "luxury wellness and nature devotees", corporate retreats and international visitors.

The documents said the lodge will include a range of facilities including a main building with food and beverages, reception, meeting rooms and accommodation.

There would be 40-60 villas or pods, while a spa and wellness retreat would offer yoga and massages.

The wellness retreat and some rooms would be immersed within the Radiata Pine forest, according to the concept design.

"Wellness is a relatively under-developed accommodation sector in Australia, particularly when compared with North America and Europe where dedicated wellness and spa properties are well established and rapidly expanding," the documents said.

"This concept offers the opportunity for an operator to build upon the unique setting of the Arboretum and create a luxury destination facility."

The commercial operators would be building and running the proposed eco-lodge at their own cost for profit.

The government said it would likely offer a long-term sublease, with a rental return of some kind to the territory.

Chief Minister Andrew Barr said a boutique eco-lodge would attract more visitors to Canberra.

"The site is well positioned and boasts spectacular 360-degree views to the Brindabella mountain ranges and Lake Burley Griffin," he said.

Director at the arboretum Scott Saddler said it was a unique opportunity to build a world-class bespoke facility that people would flock to.

He said the concept had changed from a hotel to a boutique offering allowing it to blend easily into the surrounding forest.

Mr Saddler said the arboretum was currently in negotiations with the NCA to amend the plan.

The ACT government first publicly flagged its desire for a boutique hotel at the arboretum in May 2016, as part of a public survey to help "inform" future development.

The 1.7 hectare site - forest 69, south of Dairy Farmers Hill - was previously earmarked for a future forest of Chinese golden larch trees, but an internal overview of the hotel proposal said it was a "prime location for a tourism/visitor related facility" given its central location within the arboretum and "unsurpassed long distance views to the south-east, east, north-west and west".

The arboretum opened in 2013 in an area burnt out by the 2001 and 2003 Canberra bushfires. It has since become one of the city's most popular attractions.