A signature high-rise building will be the centrepiece of a university campus for up to 10,000 students in the Parramatta central business district.

The University of Western Sydney board of trustees gave in-principle agreement on Wednesday to develop a new multi-storey home for the university, estimated to cost more than $120 million to build, in the "civic heart" of Parramatta.

Four development sites including the Parramatta Square precinct are believed to be under consideration by the university as it calls for expressions of interest for a joint venture development or lease arrangement. It will make a final decision in June and wants to occupy the building by 2017 with a focus on business, law and postgraduate studies.

The decision to go high rise is a significant one. The University of Technology Sydney set a precedent for high-rise education in the 1970s with its brutalist architectural-style tower off Broadway at the southern of the Sydney business centre. But no others have followed its lead until now.

UWS vice-chancellor Professor Barney Glover said the tower would allow the university to double international enrolments, currently 4000 students or 9.8 per cent of enrolments, figures which are low by higher education standards. He said the site also would be used to target postgraduate students.

“With our existing Parramatta campus almost at capacity, we plan to significantly expand our presence in the CBD, where we can be co-located with business and industry and increase our connection to the social, economic and civic life of Parramatta and greater western Sydney,” Professor Glover said.

"The beauty of this location is its proximity to transport and we are looking forward to Parramatta opening up to the light rail network, which would link to our south Parramatta campus.

"Transport is important for postgrad students and vitally important for international students. The evidence is abundantly clear that students out of Asia are attracted to busy urban centres."

Parramatta Lord Mayor John Chedid said the new campus would help attract high-end jobs to the city and allow the university to forge links with major businesses in Parramatta and build the case for a western Sydney light rail network.

"We know that great universities strengthen great cities," he said. "The proposal fits with our council's pro-growth vision to develop a city of the future based on centres of excellence in education, research and business."

Sydney Business Chamber western Sydney director David Borger said the decision would create more momentum for the city than any other over the past two decades.

"Cities don't get many big lumps of investment like this in the terms of capital and sheer numbers of people in such a short period of time," he said. "It's a game-changer and will change the Parramatta CBD forever and give it an unknown level of vibrancy."

The commitment to the Parramatta CBD signals a new era for the university, which began in 1988 but can trace its educational roots back to 1891 when the Hawkesbury Agricultural College was established. It has seven existing campuses at Bankstown, Blacktown, Campbelltown, Hawkesbury, Penrith, Lithgow and outside the Parramatta CBD.

Professor Glover said the chancellery would remain at Penrith "for the foreseeable future" but moving it the the university's historical Parramatta south campus would be considered.