The state government has released detailed design plans for the Perth waterfront redevelopment and has set aside $270 million in the 2011-12 state budget to kick off construction early next year.
Mr Barnett said the cost of construction would be about $440 million, but after land sales taxpayers would only have to foot the bill for $270 million.
"I can reassure the people of Perth, there has been a lot of talk, a lot of design and discussions about the Perth waterfront over at least the last 30 years, the project now is formally underway," Mr Barnett told reporters this morning.
The project will surround a 2.7 hectare inlet with a 1.5 hectare waterfront promenade that links to a man-made island.
It will also include restaurants, cafes and bars, as well as commercial and retail space at the base of residential developments.
The "nationally significant" Indigenous Cultural Centre would be situated over water at the southern end of William Street.
The timing and budget for the cultural centre will be set once major construction for the waterfront nears completion in 2014, Planning Minister John Day said.
Mr Barnett said he was optimistic the area around the project "will be the best land in Perth" and depending on the property market, believed the government will come out well from the sale.
"I'm confident and the people involved in the planning, engineering side are confident that we have got a handle on this, so that's the best projection of the cost of it," the premier said.
"I think the upside might well be there on property sales as the project comes to fruition, given the growth in the city and the demand for more residential and commercial space."
Perth Lord Mayor Lisa Scaffidi said, given the fact this project and the proposal to sink the city's railway line were going ahead, it was evident the city is truly changing.
"Along with the Perth city link, this is the most significant thing happening in our capital city, certainly within the last 100 years," Ms Scaffidi said.
"We're going to look back on this time and realise the exponential growth for our capital city right now is significant. More importantly it's enabled us to rebrand ourselves as a city increasingly on a global stage."
