There could be up to 1500 new homes at the Causeway

The ACT government will also consider a new railway station for Canberra as part of the proposal. Planning Minister Chris Steel said it could be redeveloped as a mixed-use transport hub.

The government has published a draft plan amendment for public comment for its plans at East Lake. It is the first major amendment proposed under the territory's new planning system.

The Causeway, first settled in 1925, has long been earmarked for redevelopment. The area currently has about 70 houses, which are mostly government-owned.

The government's proposed amendment has earmarked the area for 1200 to 1500 homes. The first land release in the area is flagged for the 2025-26 financial year.

"The plan has been developed after extensive consultation and expert advice through technical assessments and site investigations," Mr Steel said.

The government's East Lake plan, released last year, included a proposal to redevelop the Causeway into a precinct with buildings up to six storeys.

There was also another consultation in 2022 for the development of the East Lake project.

The proposed planning amendment would also pave the way for a new railway station with expanded uses.

"In addition to this substantial housing investment plan, we're also examining opportunities for a new Canberra railway station which could be redeveloped as a mixed-use transport hub," Mr Steel said.

Better links between suburbs and new streets are also proposed in the plans.

"The plan includes improved links within the East Lake area to surrounding suburbs by introducing new streets, cycle and pedestrian pathways," Mr Steel said.

The plans include an innovation precinct, which would join Fyshwick's Canberra Institute of Technology campus. The government would also examine different uses for a former landfill site.

There are plans for community facilities including a day-care centre and a new park.