A new stadium is a necessity if Perth is to bid for the 2019 world athletics championships, according to Athletics WA.
WA is in the spotlight as a potential host for the championships after International Association of Athletics Federation president Lamine Diack said Australia should make a bid.
The venue will be decided in 2013.
Diack said he had raised the matter with Athletics Australia president Rob Fildes.
"You deserve to have a world championships in this country," he said.
Diack made the comments after a tour of Australia in which he visited a number of sites.
It is believed Perth and the Gold Coast are favoured by Australian Athletics officials.
Athletics WA chief executive Wayne Loxley said the facility at Challenge Stadium would only be suitable as a warm-up track for the world championships.
"An event of that size would be held at the new stadium," Loxley said.
Loxley said the quality of the latest facility had highlighted Perth's favourable climate and conditions.
"It enhances athletic performance with the temperate warm conditions - it's ideal," he said.
Loxley said the benefit of hosting the championships would be huge.
"It would place you on the map because you would be attracting the world's best," he said.
Such an event was well overdue for Perth.
"There's a whole generation of West Australians that have never had an event of this magnitude ever held in their own State," Loxley said.
"It's well and truly overdue and it would be something that would be an exciting part of this generation's sporting experience."
Loxley said Athletics WA hoped to work with the Government and Eventscorp to put together a bid.
"I am sure you would get bipartisan support to secure it because it would be a very exciting achievement for the State," he said.
"It's a long-term plan and one that would also bring significant revenue and income through tourism to the State."
Eventscorp executive director David van Ooran told a parliament estimates committee last October that a world athletics championship would probably cost more than $100 million.
Brisbane failed in a bid to host the 2011 world championships, which will be held in Daegu, South Korea.
Fildes warned it was an expensive exercise with the event requiring considerable infrastructure such as an athletes village.
"It's a large commitment from a city and a State Government," he said.
Sport Minister Terry Waldron said the WA Government would consider any proposal from Athletics Australia should it seek to host the championships.