The University of Western Sydney board of trustees on Wednesday agreed in principle to develop a multi-storey home, estimated to cost more than $120 million, 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 a lease arrangement.

It will make a final decision in June and wants to occupy the building by 2017. It will house mainly business, law and post-graduate students.

The decision by a higher education institution in Australia 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 on Broadway at the southern end of the Sydney business centre. But no others have followed its lead until now.

Vice-chancellor Professor Barney Glover said the tower would allow UWS to double international enrolments, now standing at 4000 students, or 9.8 per cent of all enrolments, which are low by higher education standards.

He said the project also would allow the university to target post-graduate students.

''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 post-grad 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. It was founded in 1988 but it can trace its educational roots back to 1891 and the establishment of the Hawkesbury Agricultural College. Professor Glover said the chancellery would remain at Penrith ''for the foreseeable future'', but could be relocated to its historical Parramatta south campus.

Follow the Reshaping the West series at smh.com.au/westernsydney