The city's councillors supported a planning proposal at Monday night's council meeting, which could see an additional 6000 new homes built at Estella.

Not only did the proposal look at more housing options, but also sought to expand the commercial area where the proposed shopping centre is expected to be built.

Regional activation director Michael Keys said the council could help the developer by removing barriers in the way of the project progressing, but that is where its powers end.

Wagga businessman Stuart Webster, who owns the shopping centre land, previously told The Daily Advertiser that the project is shovel-ready, but the problem comes back to the banks that will not provide the cash required for the $12 million complex.

Mr Keys said if the developer cannot get the banks to the table, the council cannot make the commercial development happen regardless of the demand.

He said the council is reluctant to rezone land for other developers to pursue similar commercial projects.

"Having other sites ... available for that could actually hinder (the development) and make it harder," he said.

"And the location of that Estella neighbourhood shop is central to the whole precinct with connections to open space, active travel networks and proximity to schools."

Wagga mayor Greg Conkey said the developer owns the land so "it is out of the council's hands".

"I am sure others will have the same problem with banks as well," he said. "It's unfortunate. It is a fast growing area and we think it will be a gold mine out there as far as a shopping centre is concerned."

The planning proposal for further development at Estella will now need state government approval before the council will release the plan for public consultation.

In the meantime, Mr Keys said the council is currently seeking feedback on its Local Strategic Planning Statement that will shape the future of the city and determine what areas will support the predicted growth.

"Estella and our northern growth suburbs are key for our future and we are happy to see strong interest and strong demand and we will continue to support that," he said.

Once all the land is released for development in the northern suburbs, Mr Keys said the council will look beyond the CSU campus for further housing options.

"I encourage people to have a look and get involved and understand and appreciate what those opportunities could be," he said.