The ACT will lobby the National Capital Authority to reclassify Molonglo as Canberra's sixth town centre.
The fast-growing area's commercial centre was originally planned for surrounding suburbs of 55,000 residents but more than 70,000 people are expected to live in the district by 2050.
Planning Minister Chris Steel said the ACT was working on a case to the National Capital Authority to amend the national capital plan to include Molonglo as a town centre.
"This change will cater for projected higher growth expected in the Molonglo Valley and will guide the Suburban Land Agency's work in developing Molonglo's major commercial centre," Mr Steel said.
The government said plans for the commercial centre already included the type of infrastructure expected in a town centre.
The centre is expected to host a community centre, transport interchange, library, college and town park.
"At current projections, the area could even surpass the population of the City Centre and Woden Valley. That's why it is time to reclassify the suburb of Molonglo to reflect the scale and status of this district," Mr Steel said.
Population forecasts released by the ACT Treasury in February 2023 show the government expects the Molonglo Valley to house more than 86,000 people by mid-2060.
The Molonglo Valley district will be Canberra's fastest growing area in the next 40 years, growing at an average annual rate of 5.3 per cent.
But multiple planning strategies for the city's newest district showed the government expected between 55,000 and 60,000 people would live in the area.
The district includes suburbs Molonglo, Wright, Coombs, Whitlam and Denman Prospect.
The government has previously indicated the Molonglo group centre could transition to a town centre if the larger population warranted the change.
Mr Steel said the government would also soon begin a community needs assessment for the Molonglo Valley district to determine current and future residents' needs.
"This includes understanding what additional community infrastructure and services are required to support this growing and vibrant community, such a places of religious worship, cultural facilities, government and social services and recreation facilities," he said.
"This feedback will help not just to finalise plans for the proposed Town Centre but also in existing and future suburbs which will be released in 'Molonglo 3'."
Mr Steel, who was handed the planning ministry in December, has previously told The Canberra Times encouraging developers to build more housing around shopping centres was one of his priorities.
"One of the priorities that I will be discussing with the Planning Directorate early on is asking them to do a piece of work around how we can provide more homes and better shopping centres, at every shopping centre, local and group centre in Canberra," he said in January.
The minister's statement of planning priorities - which will include reclassifying the Molonglo group centre - would be released soon, the government said.
The Molonglo Valley Community Forum welcomed the ACT government's announcement.
"This is a significant and long awaited step towards fulfilling the vision of the Molonglo Valley as a vibrant, well-serviced and sustainable community, with a complete range of shops and facilities that meet the needs of its current and future residents," Ryan Hemsley, the forum's convenor, said.
"The Molonglo Forum look forward to working constructively with the ACT government to provide community feedback and input on the design and development of what will become the lively, beating heart of our district."
