He says jobs in the private and community sectors will be key to the ACT's economic recovery, flagging a need to cut red tape for industry.

The government's full plan will be part of the ACT budget update released on Thursday, and will include $130 million in economic development grants over four years.

The update will for the first time show the full financial hit of the pandemic on the budget's bottom line, with the territory's deficit expected to blow out by hundreds of millions of dollars.

Before the coronavirus pandemic, there were 238,000 people employed in the territory, but that has dropped to 233,400 because of the economic impact of the virus.

The government's new target would mean there would be 250,000 local jobs by 2025. Mr Barr said investment would be targeted at 10 key industries.

He singled out cyber security as a particular area of opportunity for the ACT, both for education and jobs, saying there was currently only a fraction of the graduates needed to meet demand in Australia.

Mr Barr said it presented a big opportunity for education providers, including Canberra Institute of Technology, to ensure there was an appropriately trained workforce.

Canberra's position as the home of the Australian government put it in a prime position to leverage a higher proportion of new cyber security jobs, he said.

"This is an area that the Australian government is going to be investing a lot more in," Mr Barr said.

"There will be a lot more private companies who are already here expanding their employment."

He has also flagged creating greater "flexibility" in the planning system, particularly in commercial zones.

Meanwhile the easing of regulatory requirements for business during COVID-19 will likely become permanent.

"Maintaining confidence in non-government sectors will be critical to Canberra's future, and the government will continue to play a role in protecting and creating jobs across both the private sector and the not-for profit sector," he said.

Among the other industries Mr Barr has singled out as key to recovery include healthcare, renewable energy, community services and creative industries, saying the territory could become a key location for the filming of TV and movies.

READ MORE:

"We will invest in growing emerging industries and support innovation by creating and shaping future markets. This investment will include targeted skills development and partnering with our world-leading tertiary sector to train the workforce of the future," he said.

"The pandemic isn't over, and the economic impacts will be felt for generations."

Mr Barr said targeted infrastructure investment, the continuation of the territory's tax reform agenda and the cutting of red tape would all be key to creating and protecting local jobs.

The plan will also outline new jobs within the ACT public service.

Thursday's budget update is expected to show the predicted 2019-20 deficit of $255 million will blow out significantly, while debt will also markedly increase.