Lake Wyangan could become a fully-fledged suburb of Griffith under a masterplan.
The plan will see 1200 housing lots created in the area, each with a minimum size of 500 square metres.
Griffith City Council have endorsed a draft of the masterplan, which is currently on public exhibition.
Mayor John Dal Broi said the masterplan would help address the need for more housing over the next 15 to 20 years.
"It's the next major suburb of Griffith," Councillor Dal Broi said.
It's the next major suburb of Griffith.Mayor John Dal Broi
Cr Dal Broi said the potential for the city's growth was exciting and said the plan had been a "long time coming".
"There have been some smaller horticulturalists who have been wanting to create residential blocks," he said.
"It's going to make a major impact on housing in Griffith."
Cr Dal Broi said the plan was about creating a guide for the future use of the land, and wouldn't change how the land is currently used.
He said while some farmers were keen to sub-divide their land and turn into into residential land, others might prefer to keep farming.
The masterplan includes not just residential lots, but also space for commercial and recreational use.
Cr Dal Broi said in time those extra services would improve the value of existing residential properties at Lake Wyangan but there was plenty of choice for residents as the area was close to the city's centre.
"I believe they will have more access to more services there," Cr Dal Broi said.
"If you look at the distance from Collina to major services, Lake Wyangan is closer.
"I'm predicting it will be the next place to go for building a home."
Cr Dal Broi encouraged community members to look at the masterplan and provide their feedback to council so possible changes could be considered and made.
He said a contributions plan for developers to help pay for roads, sewer and water connections was still to be worked out.
The masterplan is currently on public exhibition for up to 28 days.