Two architects in their 20s have beaten a field of experienced international rivals to design a major new public space in Sydney. Their design has a "community living room" theme.

Felicity Stewart, 29, and Matthias Hollenstein, 28, of the firm Stewart Hollenstein, won the right to design a $40 million library and plaza at Green Square, on the southern edge of the city centre.

The below-ground vision will include garden storytelling, rolling hills and a sunken garden for reading and relaxing. It features an amphitheatre, water play area and music rooms where residents can practise on their instruments without disturbing neighbours.

The space will host impromptu concerts, as well as movies and festivals.