A new protected grassland is planned for Franklin with the ACT government announcing on Tuesday the site would offset the environmental damage caused by development at the Yarralumla Brickworks.
The grassland, located at the corner of Flemington Road and Well Station Drive, is "a stronghold" for many threatened species, according to ACT Parks and Conservation ecologist Thea O'Loughlin.
"I've monitored this site for over a year and we turn up really good numbers of golden sun moth, striped legless lizard and [native plant] Ginninderra peppercress," Ms O'Loughlin said.
"This is particularly important because it's one of the four known sites in the world where Ginninderra peppercress occurs.
"It's also foraging habitat for Superb parrot which can turn up in the woodlands here, they're a critically endangered bird."
Member for Yerrabi Suzanne Orr said the site would add to the amount of natural temperate grasslands in south-east Australia which are substantially under threat.
"Our grasslands are critically endangered, there's only 10 per cent left across the eastern seaboard and a large proportion of that 10 per cent is here in Gungahlin," Ms Orr said.
"It's really important we look after these spaces."
She said the impact on the natural environment in Yarralumla provided a great opportunity to improve the Franklin site.
"The offset scheme recognises that if there is a development in one part of the city that might have an impact on the ecological values, they want to see a site in another part of the city invested in and improved to make up for that," she said.
Ms O'Loughlin said rangers had begun work on the site with the promise of it being converted to a protected grassland, with weeds such as Patterson's curse and blackberry requiring removal.
It could also be a site for translocation of the golden sun moths but she said studies were required to see whether that would prove successful and the priority was to grow the current moth colony there.
Friends of Grasslands president Geoff Robertson welcomed the decision to turn the area into protected grassland but said it's success would depend on the community.
"This site provides a lot of possibilities for the community to become involved and to also be used as an education and research site," Mr Robertson said.
He hoped concerns such as grasslands posing risks of fire, snakes in urban environments and allergy concerns could be changed so people better appreciated grasslands.