A source told Fairfax Media the R B Smith Community Centre on Crawford Street was also a top contender.

The car parks were identified as part of a confidential feasibility study commissioned by the council.

Councillor and chair of the Cinema Project Advisory Committee Jamie Cregan said the sites identified by the study would help activate the city's CBD.

"It will encourage outdoor dining and dining areas that go hand in hand with a cinema complex," he said.

Cr Cregan was hopeful the new proposal would encourage private investment in the area. He also hoped the site could include retail and residential opportunities as well.

"Something similar to Nishi in NewActon but keeping with our regional identity," he said.

Cr Cregan said there were "quite a few" sites looked at for a cinema complex but the nursery site slated for the development last year was one of the least suitable in the recent study.

Mayor Tim Overall said the car parks had long been preferred site options. He said the nursery site - with its proximity to the shopping centre, eateries, transport and the park - was also ideal.

"The consultant [of the recent report] weighted their assessment heavily in favour of a cinema being at the very centre of the CBD," he said.

"[It's] quite reasonable but there are other factors to be taken into account for a stand-alone complex."

"On resolution of the council, we will now re-explore these inner CBD blocks."