The public works committee report, released on Monday afternoon, considered the large volume of submissions and evidence, and recommended the project be approved.

The controversial Australian War Memorial redevelopment project has long received government and opposition support but Labor members have thrown its future into question after they suggested further consultation was needed.

While Labor committee members David Smith and Tony Zappia supported the overall plans, their dissenting report recommended two major changes.

Labor urged the government to reconsider the need to demolish Anzac Hall, proposing alternatives that would see the structure saved.

Mr Smith and Mr Zappia also recommended considering lower cost options, citing a paper that showed the memorial's Mitchell precinct could host its collection for around $100 million, or a fifth of the cost.

"The Labor members of the committee have sought to hold the government and the AWM to account over the proposal to ensure it is delivered on time and on budget," the members said.

"We also seek to ensure that effective community and stakeholder consultation is undertaken on the proposal, and that the heritage and integrity of the building - as a solemn place of commemoration - is preserved."

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The report also noted the strong interest in the institution and, specifically, in the proposed demolishment of the Anzac Hall.

"This high level of public interest is a clear reflection of the important place the AWM holds in the minds of many Australians," the report read.

"The AWM is a part of a much wider debate and discussion about these matters, and maintaining its ability to perform this role is an important cultural benefit to all Australians.

"Many of these views relate to the status of Anzac Hall, a building less than 20 years old and one that many submitters consider a work of great architecture."

The plans to expand the memorial will result in a larger facility that would host more of the memorial's collection. The memorial has said it intends to include more on recent conflicts, including those in Afghanistan, Iraq and Syria.

But the popular Anzac Hall, first built 20 years ago, will need to be demolished in order to make way for the extended public display.

The proposed expansion has been the centre of controversy with heritage authorities and historians slamming the idea that would have a major social and physical impact on the site.

In a submission last year, Australian Heritage Council chairman Dr David Kemp wrote he could not support the proposed changes, stating it would be detrimental to the site's overall aesthetic.

"Physical expansion to support the display of large objects such as submarines and aircraft is not a sustainable intent over the long term and, in the current circumstances, cannot be achieved without significantly impacting listed heritage values," Dr Kemp wrote in the submission.

"Regrettably the council cannot support the conclusion that the proposed redevelopment will not have a serious impact on the listed heritage values of the site and recommends that the matters above be given serious attention."

The plans received the green light from Environment Minister Sussan Ley in December 2020 under the Environment Protection and Biodiversity Conservation Act following departmental advice.

The redevelopment will need to pass a final hurdle with approval from the National Capital Authority before it can begin works.

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