Grasses and groundcover for light rail tracks will be trialled in a specially built experiment area at the National Arboretum to ensure the right plants are chosen for the extended route from the city to Woden.
The government will build a 20 metre by 30 metre area to test out the plants, which will include laying track and other substructures.
Transport Minister Chris Steel said green tracks were a good solution to limit the urban heat island effect, reduce glare and dampen the noise of light rail.
"The prototype will be tested and grown at the Arboretum and include all the supporting infrastructure required to simulate the environment where the future light rail track slab will be in the city," Mr Steel said.
Green tracks would be used on Northbourne Avenue and along Northbourne Avenue in front of the Melbourne Building. Plantings will be added to the median in front of the Sydney Building to maintain the symmetry, Mr Steel said.
"It's also set to be featured on the Commonwealth Avenue median to maintain consistency along the highly significant avenue," he said.
Mr Steel said the government would test different turf mixes and irrigation systems in a publicly accessible location.
Construction of the experiment site is set to begin next month and will be monitored for 12 months from its completion in December.
"Stage two of light rail is the biggest infrastructure project in the history of our city, and while we're designing and building the new stages, we want to make sure we're creating as many opportunities for green space along the alignment as possible," Mr Steel said.