Hobart City Council will vote on Monday night on whether to give in-principle support to the return of 4.9ha in Queens Domain to the Aboriginal Land Council of Tasmania.
It is believed to be the first proposal of its kind at council level in the state, although land has been given back by councils elsewhere in Australia.
In-principle support would be the first step in a potential land return, which would require further investigation, another council vote and a public feedback process to get the green light.
The land is on a hill which provides 360-degree views of Hobart across the city's River Derwent and to kunanyi/Mt Wellington.
"It's a significant cultural landscape. All of Country is, but there you can really feel the connection from the mountain to the river," land council general manager Sarah Wilcox said.
"It's been a bit neglected. There is lots of rubbish around.
"This is an opportunity to bring it back into cultural care and custodianship."
Tasmania has a dark colonial history and was the place of widespread killings and massacres of Aboriginal people.
Queens Domain, which is 230ha in total, was first occupied by colonists in 1804 after they abandoned their initial settlement.
The domain, a public area which now contains sports facilities and walking tracks, is home to culturally significant grasslands.
In a submission to council in 2025, the Tasmanian Aboriginal Centre said it had long advocated for an Indigenous owned and operated cultural centre.
Ms Wilcox said the land would remain open to the public, and a centre would help share stories and add a new element to tourism offerings.
The centre, which would only be built on already disturbed land, could act as a keeping place for Aboriginal cultural items.
"This is our big challenge. Our cultural items are kept in museums. They're locked away," Ms Wilcox said.
"We want to bring them back to community so we can care for them.
"It is Aboriginal heritage. It is Aboriginal culture. It should belong with Aboriginal people."
Initial feedback from councillors and the state government had been positive, she added.
Aboriginal Affairs Minister Bridget Archer said the proposal was worthy of consideration and she was looking forward to the council's deliberations.
If the council provides in-principle support, it will then determine how the land could be subdivided and how a return of land would work legally.
"I'm confident we can move through this and there can be a beautiful place created," Hobart mayor Anna Reynolds told ABC Radio.
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