The ACT Government will hold a 12 month trial of "smart parking'" in the busy Manuka shopping precinct at the start of next year.

Ground sensors will be installed to gather real-time parking information, which will then be relayed to drivers through a smartphone app and traffic signs.

The innovative technology means drivers will be able to use their smart phones to find available parking spaces.

ACT Chief Minister Andrew Barr said smart parking would save drivers time and reduce traffic delays.

"What we're seeking to do is to provide easier ways for Canberrans to get around our town and shopping centres," he said.

Mr Barr said Manuka was selected as the site of the smart parking trial as it provided a mix of on and off-street parking, as well as paid and time-limited parking.

"We think it is probably the best sized trial... for Canberra," he said.

Inner South Community Council chairman Gary Kent said the project would be extremely beneficial to motorists and shop owners.

"Studies overseas show that it could result in a reduction of 50 per cent in the time spent driving around looking for a car park," he said.

"That means that people will have more time for shopping, less time for driving around, fuel savings."

Technology sparks fear over benefits for parking inspectors

But Opposition spokesman Alistair Coe said he was worried the new technology would be used to alert parking inspectors to drivers who are overstaying their car park limit.

"There would be a lot of people who are thinking the Government is simply going to use this as yet another way to gouge Canberrans of even more money," he said.

However, Mr Barr said the technology was simply aimed at helping motorists finding vacant spaces and not for parking inspectors.

"For parking inspectors it won't mean a huge amount, it is really targeted at consumers," he said.

"It will help retailers because it will reduce the amount of time that people spend circling a shopping centre looking for a car park so it will assist in providing more convenient and efficient parking."

Mr Barr said if the trial was successful, smart parking would be rolled out across the ACT.

The procurement process is now under way and the successful vendor will be announced at a later date.

The program will be funded under the Digital Canberra Action Plan.