Bluetts Bock, which has long been at the centre of a debate over Canberra's urban sprawl and conservation, would become a nature reserve under a planning amendment to be put forward by the ACT government.
Planning Minister Chris Steel said there was strong community support to turn the area, which is on Canberra's western edge, into a nature reserve to protect its environmental values.
"That is why the ACT government is taking the first step to make this a reality under the new Planning Act. The territory Planning Authority has been consulting with the Conservator of Flora and Fauna and the ACT Parks and Conservation Service (ACT PCS) in preparation of the minor plan amendment," Mr Steel said.
"If a decision by the territory Planning Authority is made to turn the identified parts of Bluetts Block into a nature reserve, it will mean this area and the significant environment values are protected in perpetuity under the Nature Conservation Act 2014."
The government will propose the protection of block 403 at Stromlo and block 12 at Denman Prospect.
The government said it would separately consult with the lessee on the adjacent block 402 at Stromlo regarding future environmental protection.
Environment and Parks Minister Rebecca Vassarotti said the blocks had been chosen because of "extraordinary biodiversity".
"It is home to a variety of threatened species and plants such as the superb parrot, scarlet robin and the pink-tailed worm-lizard," Ms Vassarotti said.
"The proposed reserve in this area will provide a vital green space for local Molonglo Valley residents, as well as help build resilience against climate change and enhance connectivity across the urban landscape."
Mr Steel said more information about public consultation on the designation of the Bluetts Block areas as a nature reserve would be released in coming months.
Ms Vassarotti, a member of the Greens, and Labor's Mr Steel were at loggerheads in March over Mr Steel's decision to use call-in powers to approve an estate development plan in Denman Prospect in an area that adjoins with Bluetts Block.
"I was blindsided by this decision," Ms Vassarotti said at the time. "This decision to call in this development is something that I was not aware of and so I'm deeply concerned about that."
Mr Steel said ACT Labor was committed to increasing housing supply in Canberra. "This decision will enable more housing and more affordable housing to be built as soon as possible," he said in March.
The ACT Greens election platform includes setting city limits to prevent urban sprawl in the capital, while Labor has said Canberra can continue to support both greenfields and urban infill housing development.
