THE WA State Government's decision to build a new major stadium in time for the 2018 AFL season has been welcomed by all levels of football, with AFL chairman Mike Fitzpatrick describing it as a boost for the game.

WA Premier Colin Barnett announced on Tuesday that the new multi-purpose stadium would be built on the Burswood Peninsula with a capacity of 60,000 and the ability to expand to 70,000.

The new $700 million venue, which has the working name 'Perth Stadium', will be modern and iconic, the Government said, with lighting that will "dress" the stadium in the home team's colours.    

Seating will be in the style of Etihad Stadium, with similar views, amenities and comfort.  

It is unclear if the unique ground dimensions of Patersons Stadium will be retained, but Fremantle chief executive Steve Rosich said his club would have input into that.

Rosich said Fremantle would work with the State Government and the Perth Stadium steering committee to ensure good commercial outcomes for the club.  

"Our conversations with the Government to date, they are very cognoscente to the commercial realities of football in this state and we value highly our ability to contribute to game development here in Western Australia," Rosich said on Tuesday.

"We want that to continue to ensure the game is in great hands."

West Coast chairman Alan Cransberg, whose club has a seated membership waiting list of almost 8,000 people, said he was absolutely delighted and it was about time Perth had a world-class stadium.   

Patersons Stadium will remain as a venue, potentially hosting WAFL matches and pre-season games, and Cransberg said West Coast would look to further develop its base at the ground.

"There's a level of detail behind that, but we want to see what happens with Subiaco Oval," he said. "Our goal would be to be able to develop facilities for our players and our club at Subiaco Oval.

"We'll work towards that with the football commission and the planning bodies."

WA Football Commission chairman Frank Cooper welcomed the announcement on Tuesday, describing it as a "fantastic occasion for football".  

The WAFC currently derives 80 per cent of its income from its lease on Patersons Stadium and the West Coast and Fremantle licences.

Cooper said he was extremely confident the new stadium would deliver adequate financial outcomes for football in WA.

"The two AFL clubs have sold out memberships, effectively, [and] their ability to continue to grow and their finances to continue to compete in the AFL have been limited by Patersons Stadium," he said.   

"This stadium will give them the opportunity to take the next steps forward that they need to continue to compete successfully in the AFL.

"That's vital for us here in Western Australia and the finances will in turn flow through into the development of the game."

Detailed design work is yet to be done on the new stadium, with an international design competition planned to attract the best ideas.

Construction will take four years, with the possibility the stadium could be completed halfway through 2017.