THE West Australian Government this week announced that Perth's new $700 million, multi-purpose stadium will be built on the Burswood Peninsula and is scheduled for completion in 2018.

The new Perth Stadium will have a capacity of 60,000 seats, with provision for future expansion to 70,000 seats, making it the third-biggest capacity stadium in Australia and the second largest AFL home stadium.

"Burswood Peninsula is unconstrained by surrounding development and Government-owned, which will allow us to achieve the vision of a world-class stadium precinct," Premier Colin Barnett said on Tuesday.

"The new stadium will be the centrepiece of an emerging eastside precinct at the gateway to Perth and is within walking distance of a range of potential transport options including footbridges, ferries, and trains," Mr Barnett said, adding that the government wants people going to the stadium for an event to catch public transport.

Aiming to achieve a high quality and state-of-the-art facility, the government will hold an international design competition to attract the best ideas. The design will not include an underground car park.

"Together with the Perth Waterfront, the City Link, the Perth Cultural Centre, the Riverside Development, and the Perth Arena, a new stadium will enhance Perth's reputation as a world-class city with a range of entertainment options," Mr Barnett said.

The final cost of the stadium will be determined after the design process has been completed. However, the current indicative cost for the stadium is approximately $700 million, excluding costs associated with upgrades to transport infrastructure.

The 2011-12 State Budget allocated a total of $13 million over two years for planning of the new stadium.

A steering committee will be established to oversee the project and will be co-chaired by the executive director of the Office of Strategic Projects, Richard Mann, and director general of the Department of Sport and Recreation (DSR), Ron Alexander.

The committee will be tasked with the creation of a master plan for the stadium precinct, including a decision on the exact location and a detailed costing of the project.

"The new stadium will be a true multi-purpose facility able to hold not only sporting events such as football and major international rugby, cricket and soccer games, but major cultural events such as concerts as well," said Sport and Recreation Minister, Terry Waldron.