Wellington City Council has settled on a site for a planned indoor arena, on the capital's waterfront.

The waterfront site of Wellington's irreparably damaged BNZ building has been chosen for a proposed indoor arena.

City officials have long dreamed of a 12,000 seat arena designed to fill the gap in the capital's venue offerings, a prospect another step closer with the preferred site decided upon.

The region's mayors were briefed on the proposal during a private meeting on Tuesday, but whether the Harbour Quay land is available, and where the money will come from, remains uncertain.

The plan envisions an adjoining precinct of residential, commercial and retail buildings, effectively creating a new neighbourhood in an under utilised part of the CBD.

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SUPPLIED The plan for an indoor arena includes a surrounding precinct of residential, commercial and retail buildings.

Many sites for the arena have been considered and ruled out, including the current TSB Arena, Taranaki St and Petone.

Architecture firms WSP Opus and Cox, commissioned to evaluate the various sites, reported on five options: three sites on Centreport land and two above KiwiRail yards between Wellington Railway Station and Westpac Stadium.

Deemed the most feasible and favourable of options for the oval-shaped arena was the site which includes a portion of the current BNZ building and the section adjacent to it.

Wellington Mayor Justin Lester was confident an arena, if properly engineered with base isolators, would not suffer the same fate as both the BNZ building and Statistics House.

Both sustained irreparable damage in the 2016 Kaikōura earthquake, and the decision to demolish the BNZ building was announced in October.

SUPPLIED A concept design for the indoor arena, which is said will attract international acts.

Money for the project isn't necessarily available, Lester said, so the arena would be developed in a private-public partnership similar to Spark Arena in Auckland.

"I won't go into names at the moment. We would go in with experienced promoters and venue operators, coupled with precinct development partners."

The council has in its long-term plan set aside an $85.7 million contribution to the indoor arena plan, but beyond that costs are unknown.

Remediation of the land will be required before foundations can be built, and the waterfront site will need to be bolstered with improved sea walls.

SUPPLIED The plan for a 12,000-seat arena is in the early stages of development, with a commissioned report deciding the best site is on current Centrepoint land, including the site of the BNZ building due to be demolished after sustaining significant damage in the November 2016 Kaikōura earthquake.

"We're at the stage now where we want to have more serious discussions with our partners around this location," Lester said.

Wellington Greater Regional Council chair Chris Laidlaw said the preferred option was part of a wider plan for the wharf precinct yet to be settled.

KEVIN STENT/STUFF Wellington Mayor Justin Lester said a public-private partnership could build the indoor arena.

"What we have is a really big opportunity to create a precinct with some coherence, at the moment it's a mix of wasteland and some disused buildings."

A "master plan" including a proposed new ferry terminal and bringing together the interests of Centreport, New Zealand Transport Agency, ferry companies and both regional and city council, should be completed in the second half of 2019.

KEVIN STENT/STUFF Greater Wellington Regional Council chairman Chris Laidlaw said selecting a preferred option for the indoor arena was a step in the right direction.

"It's only at that point that we'll be able to take seriously the concept of where an arena might fit."

He anticipated an urban development authority, which could include both councils and private entities, would be created once the overall plan was clear.

"From the regional council's perspective, we don't have money in our long-term plan for this ... the question of funding is going to something that will have to be discussed."

A previous report into the strategic case for an indoor arena determined a 12,000-seat arena would double the 40 events held at the smaller TSB Arena each year, events worth about $26 million to the region.