The Federal Government will set up an expert panel to advise it on recognising Indigenous Australians in the Constitution.

Prime Minister Julia Gillard says the panel will guide a national debate on the issue in a bid to maximise the chance of the vote being successful.

"The first peoples of our nation have a unique and special place in our nation," she said.

"We came to government also knowing that change was needed on an emotional level as well as a practical level.

"The recognition of Indigenous Australians - Aboriginal and Torres Strait Islander peoples - in the Australian Constitution is another step, the next step in that journey."

Labor promised the referendum during the election campaign but it is not the first such pledge.

Before the 2007 election, then prime minister John Howard promised to hold a referendum on recognising Indigenous people in the preamble to the Constitution.

After the Coalition lost, Kevin Rudd began consultations with Indigenous communities on the form and timing of constitutional recognition.

Ms Gillard says there is bipartisan support for the change in the Parliament.

"We have a once-in-50-year opportunity for our country," she said.

"I'm certain that if this referendum is not successful, there will not be another like it.

"Now is the right time to take the next step and to recognise in the Australian Constitution the first peoples of our nation.

"Now is the right time to take that next step to build trust and respect."

Ms Gillard says the panel will include Indigenous and non-Indigenous Australians, community leaders, constitutional experts and members of parliament.

The panel will report to the Government by the end of 2011 on the best path towards the referendum.

Hard work

Aboriginal and Torres Strait Islander Social Justice Commissioner Mick Gooda says three years of hard work lies ahead.

"But it is three years of hard work I'm looking forward to," he said.

"The self-worth Aboriginal people would feel will have a dramatic effect.

"More importantly, we now have three years to build the relationship that will change Australia forever."

Mr Gooda said the panel should set a benchmark of 90 per cent support at the referendum.

"That's what we got in 1967 and that's what we should aim for this time," he said.

"It's not just about Aboriginal and Torres Strait Islander people... this is Australian culture."

The Minister for Indigenous Affairs, Jenny Macklin, says it is a big step forward.

"This is a very significant day, a very significant step forward in that journey that we began with the apology," she said.

"We are very optimistic that this change can be brought about through goodwill.

"We're calling on Australians to come forward with their suggestions as to who might best contribute to the expert panel."

Limited success

Since Federation, only eight of 44 referendums have been successful.

To succeed, the referendum must attract the support of a majority vote nationally plus a majority of votes in a majority of states.

While Attorney-General Robert McClelland acknowledges securing a yes vote in a referendum is "not easy", he says he takes heart from the 1967 referendum that gave Aboriginal people the vote.

But there was a failed attempt to include Indigenous Australians in the preamble to the Constitution in a referendum in 1999.

Held in conjunction with the Republic referendum, the new preamble would have recognised Indigenous Australians.

Penned by poet Les Murray and then prime minister John Howard, the version attracted much controversy and was ultimately rejected by nearly 60 per cent of voters.

The Greens say it is important the debate does not get bogged down in politics.

Senator Rachel Siewert says because it is rare for a referendum to succeed, there needs to be strong community involvement in the process.

"This cannot be a political debate, this has to be a community debate," she said.

"There needs to be very widespread and detailed consultation so the question that is asked is supported by the community."