Ngurra - meaning "home", "country" or "place of belonging" - will include a learning centre, a national resting place to care for Indigenous ancestral remains and a new home for the Australian Institute of Aboriginal and Torres Strait Islander Studies.

Prime Minister Scott Morrison said the precinct would take its place in the parliamentary triangle as a place of national pride and significance and be a "landmark of the highest order".

"All Australians and visitors to our nation will be able to gain a deeper appreciation of Aboriginal and Torres Strait Islander peoples' diversity and cultures, and the richness this offers our country," he said in a statement.

"This new world-class facility will contribute to our continuing journey of reconciliation, where Indigenous Australians can tell their stories, in the way they want, for all visitors to have a greater understanding of our shared history."

Minister for Indigenous Australians Ken Wyatt said as the AIATSIS's new home, the precinct would house and make accessible the world's largest collection of Aboriginal and Torres Strait Islander cultural and heritage items.

Remains of Indigenous Australians taken from their country would be cared for at Ngurra until they are able to be returned to their communities.

"And in instances where provenance has been forgotten or erased, they will be cared for in perpetuity with dignity and respect," Mr Wyatt said.

An architectural design competition will be run this year to develop a design that reflects Indigenous Australian's aspirations, achievements and connection to country.

Australian Associated Press