A new health building housing facilities for research and treatment will be built on the site of a car park the Australian National University has bought from the ACT government.
The university on Thursday announced it had paid $16.75 million for the 8600-square-metre site on Marcus Clarke Street, where a light rail works depot is currently set up.
A facility for "world-leading research, teaching in health, as well as a place where Canberrans can access the latest therapies" would be built in the next six years, the university said.
ANU vice-chancellor Brian Schmidt said the block was the missing piece of the university's campus.
"Future generations of students and academics will thank us for seizing the opportunity to buy it," Professor Schmidt said in a statement.
"We will use this site to bring together research, teaching, policy, treatment and public engagement to understand and meet Australia's future health needs, which is a key part of our mission as the national university."
The site is near the National Health and Medical Research Council and the Australian Academy of Science.
Professor Schmidt said the university would partner with a commercial developer to fund the project, expected to be worth hundreds of millions of dollars.
The university had paid for the block within its budget, he said.
Professor Schmidt said the university would consider any partnership arrangements that "makes sense for it to work".
"We're in a time when these types of partnerships are actually evolving, so we're very flexible," he said.
ACT Chief Minister Andrew Barr said the sale of the land would transform the under-utilised site into a nationally significant health precinct.
"In addition to world-class treatment and research, the future precinct will create jobs, draw students and clinicians to Canberra, and drive economic activity," Mr Barr said.
"The ACT government is investing in the revitalisation of the city centre and this important investment from ANU will further integrate the university into the heart of our city."
Mr Barr said the value of the sale had been determined through land valuations and was not a concessional deal.
"Cabinet considered the value of this partnership with ANU being greater than frankly just releasing the sites to the general market for any range of purposes," he said.
"That's one of the great advantages of our leasehold system is that we can, as a government, make some strategic interventions in order to support the economic development of our city."
The Chief Minister also said: "From my perspective, the territory economy and the social and cultural life of Canberra are always improved when our universities are engaged partners with the territory government.
"And when our universities are strong, our economy and our city is strong."
National Tertiary Education Union ACT division secretary Lachlan Clohesy said the land purchase showed the university could offer a better pay deal to staff.
"Staff have been told that the ANU is losing money, and that the cupboard is bare. This demonstrates that the ANU can find money when they want to for land - we're also demanding they give similar priority to staff and students," Dr Clohesy said.
"With this land purchase, ANU's claims that the cupboard is bare are difficult to believe."
The block is bordered by Marcus Clarke Street, Ellery Crescent and Gordon Street. The area was identified for sale in the territory government's 2021-22 indicative land release program.
The site was also the long-term location for the ACT's AIDS Action Council, which moved out of the now-demolished Westlund House in 2015.
Westlund House was originally built on the block in the late-1950s to house laboratories for the Bureau of Mineral Resources, Geology and Geophysics, a part of the Department of National Development.
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