Canberra's central bus interchange could be taken underground if a new public transport plan is given the green light.

Key points: Bus and light rail services would connect at an underground interchange in central Canberra

Bus and light rail services would connect at an underground interchange in central Canberra Perth and Brisbane already have underground interchanges

Perth and Brisbane already have underground interchanges The facility would include basement parking and would be air-conditioned

Under the proposal, two sites currently serving as parking lots on London Circuit would be razed and replaced by an air-conditioned, multi-level interchange servicing buses and linking to light rail services.

Put forward by the ACT Government's City Renewal Authority, the idea would see the current bus interchange, located between Alinga Street and Garema Place, make way for "new public spaces".

The authority's chief executive Malcolm Snow said the new transport hub would offer a more attractive street-scape and include basement parking.

"Anyone who stands in the bus station at the moment recognises that at times it's a bit smelly, it's a bit noisy," Mr Snow said.

"Modern cities are certainly recognising the importance of the opportunity for bus [and] light rail passengers to connect easily between different facilities and we see an opportunity for that connection to be a lot easier, for it to be a lot safer and for it to be a lot more attractive.

"But equally we're hearing traders say to us that they would be interested in us exploring this idea because what they want to see is, in a sense, a claiming back of the asphalt — to create new public spaces."

Two adjacent sites along London Circuit in the city centre will be explored for redevlopment. ( Supplied )

Big, audacious ideas

The City Renewal Authority this week announced it was seeking tenders from consultants interested in creating a plan for a "modern, contemporary underground bus station for Canberra".

An initial study will be conducted to examine the plan's feasibility before its recommendations are taken to the ACT Government, while future stages are expected to include "significant community engagement" with city workers, residents and businesses, public transport users and the wider Canberra community.

Mr Snow said the current interchange was operating efficiently, but that in the future, Canberra would benefit from a more efficient, attractively designed public transport system.

"I think the benefits of taking buses off the street are that we can repair and restore streets that at the moment are really probably pretty adversely impacted by bus operations," he said.

"They're big ideas, they're possibly audacious ideas, but they're ideas that we think nevertheless do need to be looked at and examined."

Four city blocks reserved for buses only could be reopened to general traffic. ( ABC Canberra: Michael Black )

The new interchange would also address Canberra's extreme weather conditions.

"It can be pretty cold in winter and reasonably hot in summer," he said.

"By taking it underground we can not only provide an air-conditioned environment, we also provide a really safe, attractive environment."

'Equivalent to a Qantas lounge': Taking inspiration from Perth

When the authority was tasked with redeveloping the two sites, they turned to Perth for inspiration.

The Western Australian capital underwent its own transformation when a 12-storey interchange was installed at its centre.

That multi-million dollar redevelopment was built on a much larger scale, Mr Snow said, but with a vision for the long-term future of transit they hoped to harness in Canberra.

"If you go to the Perth bus station what you see is almost equivalent to a Qantas lounge," Mr Snow said.

"It's freed up space at the surface for new public spaces, for new buildings and it's reconnected to parts of the city that were previously separated by surface bus operations."