A half-billion-dollar redevelopment of the Australian War Memorial (AWM) will be considered by the Turnbull Government, and the monument's director has insisted the country owes it to the memory of dead diggers to build it.

Key points: Plans include an underground exhibition hall for military aircraft, and "quiet reflection" area

Plans include an underground exhibition hall for military aircraft, and "quiet reflection" area Memorial director would not disclose cost, but government sources estimate up to $500m

Memorial director would not disclose cost, but government sources estimate up to $500m Expansion would take up to a decade to complete if approved

Draft architectural plans for the ambitious project include a complete redevelopment of the memorial's lower ground floor and a new cavernous, underground exhibition hall to house recently acquired military items such as helicopters and jet fighters.

The complex and expensive expansion could take almost a decade to complete if approved.

The Australian War Memorial opened on Remembrance Day in 1941, but it has undergone a few changes since then. ( Supplied: Australian War Memorial )

Australian War Memorial director Brendan Nelson said the "national project of significance" would ensure the heritage and integrity of the sacred 76-year-old Canberra building is preserved.

"This redevelopment will largely be an underground redevelopment which necessarily means that we will have a period of disruption, but one that will be well worth it," Dr Nelson said.

He declined to say what the project was likely to cost, but said he believed the final price tag would have widespread political and public support.

"Whatever the cost is, as one man said to me: 'We've already paid. We've paid in blood, and whatever the Government spends on the Australian War Memorial … will never be enough.'"

Government sources have told the ABC the total cost of the redevelopment could top $500 million, with a detailed business case expected to be completed by the end of the year.

Just 4 per cent of the Australian War Memorial's collection is currently on public display, while newly acquired items such as a Chinook, a Sea Hawk, a Black Hawk and an F/A-18 remain in storage.

Newly acquired items including a Chinook A15-202 are sitting in storage. ( ABC News: Tom Lowrey )

As well as the underground exhibition hall, the expansion would see "back-end" administration operations relocated to a new building that would replicate an existing one on the side of the memorial.

It would also include a dedicated area for "quiet reflection" and a new exhibit dedicated to current military operations.

"We envisage, for example, having a large screen and taking an unclassified feed from Defence and presenting Australians with what is happening today," Dr Nelson said.

AWM chairman Kerry Stokes and Dr Nelson have briefed the Prime Minister, the Treasurer and Finance Minister, as well as the Federal Opposition, on the proposal.

RSL National President Robert Dick welcomed the proposal, and said he believed it would be possible to keep the memorial open during the lengthy building work.

"With the amount of equipment and memorabilia that the Australian War Memorial have in storage, the stories of the people who have served our country need to be told and for future generations it's a step in the right direction," Mr Dick said.