The plan for up to 4000 new homes in the zero net carbon development have been unveiled in a new report released by the city council.

Councillors described the report as a "step in the right direction" and an "exciting move forward" when they voted to release the Zero Net Carbon Development Opportunities and Feasibility report.

The plan, which covers 360 hectares of land east of Aberline Road, comes after consultation between landowners, government agencies and other stakeholders was held in September.

It also comes off the back of the council's Green Warrnambool plan which has the goal of becoming the most environmentally sustainable regional city in Australia and sets a target of zero net greenhouse gas emissions by 2040.

The report will be used to create a precinct structure plan for the area, but does warn that imposing design guidelines on the land could run the risk of putting off developers who have other plans for their properties.

Work on the structure plan to guide future housing development in the area was given a $200,000 boost in 2019 from the state government.

The report flags the creation of a new government-run primary school in the precinct, community centre and potential shop.

"The precinct structure plan would need to consider appropriate locations for a potential retail convenience centre and the provision of a primary school which can be accessible to residents without a private vehicle," it says.

The report says building display homes featuring the zero carbon, all-electric homes would be critical in educating the public.

To make sure the houses are energy efficient could add as much as $8000 to the cost of each property, the report says.

It also suggests the residential development sign up to a power purchase agreement with a renewable energy company, that rain water is harvested from rooftops, tanks are installed, and solar panels and batteries are required.

Making solar compulsory would add $3500 to the cost of the home, but would bring $950 in benefits each year, the report says.

Installing a floating solar system on the raw water storage ponds in the precinct's south, which would sell power to businesses, has also been mooted

Gas would be banned from the subdivision, with electric heating and cooking promoted instead.

"...gas will not be supplied to the precinct. A low carbon precinct is dependent on removal of gas supply...," the report says.

Accelerating the uptake of electric cars would also be encouraged in the precinct with either a charging point or wiring installed on each dwelling.

Cr Angie Paspaliaris said the report was a step in the right direction as far as addressing the components of the Warrnambool 2040 community plan.

"It is probably something that is aiming fairly high and well into the future," she said.

"At least if there's a template provided, or at least initiated, then it can be something to work towards down the track.

"I think it's positive overall in terms of addressing a more green city."

Cr Debbie Arnott said it was very encouraging to see that maybe Warrnambool could lead the way in providing sustainable and environmentally friendly housing in the future.

She said it aligned well with the council's 2040 plan.

"I think it is an exciting move forward," Cr Arnott said.

When announcing funding for the precinct plan in 2019, the state government said development of the area would deliver housing for an extra 9000 people and could create 8800 jobs.

The precinct covers a parcel of land from Wangoom Road to the north, Dales Road to the south, Aberline Road to the west, and Horne Road to the east.