Up to 20,000 people living in 12,500 dwellings on the Burswood Peninsula would be clustered in "transit oriented neighbourhoods" around the Belmont and Victoria Park train stations under a new master plan.
Planning Minister John Day yesterday released for public comment the draft 20-year plan which includes the potential for a new vehicle bridge from the peninsula to East Perth.
The plan will guide the expansion of Crown Perth, the Burs-wood Stadium precinct and the redevelopment of Belmont Park Racecourse. It is expected to create a new sporting, entertainment, commercial, residential and tourism destination.
"There are a number of residential developments here already but there is the opportunity for a lot more to be achieved and for it to be a really active precinct close to the CBD," Mr Day said.
He said he expected the plan to receive positive public feedback, but conceded residents in high-rise apartments currently on the peninsula would not be keen for further interruptions to their city views.
"I think most people would understand the need to take action to limit the amount of urban sprawl in Perth," he said.
"We have a very large Perth metropolitan area but generally very low-density development and where we have the opportunity next to develop major public transport facilities close to the CBD, we need to take advantage."
Perth's population is expected to grow by 500,000 by 2031.
Mr Day said much of the peninsula's former use as a rubbish tip would be overcome with engineering solutions, demonstrated by the construction of the stadium.
Tourism Council chief executive Evan Hall said a bridge containing a bike lane was an innovative part of the plan.
He said the prospect of tourists catching a cable car to Elizabeth Quay from Kings Park and then hopping on a ferry to the Burswood Peninsula was very exciting.
The plan is open for public comment until November 25.