Plans to transform the heart of Parramatta into "western Sydney's Martin Place" have taken a major step forward after years of delays and cost blowouts.

A path has been forged for the development of Parramatta Square's key sites,

The proposed $2 billion Parramatta Square redevelopment is one of the largest urban renewal projects in the country and aims to position the city as a rival to the Sydney CBD.

It includes the construction of at least five major commercial, residential and civic buildings which will border a 250 metre long public domain and thoroughfare in the core of the city.