On Wednesday Lands Minister Terry Redman launched the Shoreline development, the first of three precincts between South Beach and Port Coogee, and the future site of some 2500 medium to high density homes for about 5000 people.
The 47ha precinct will include a primary school, sporting facilities and significant commercial and retail space.
Mr Redman said the release, to be followed by the Hilltop and Power Station precincts over coming years, offered the "whole mix".
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READ NOW"This is a medium to high density development but it's contemporary, it's on the coast, it has those open spaces people want to see and has the beach piazza, it has the commercial and retail space, it has the hospitality," he said.
"All those things are key parts to make an area work."
When all three precincts are complete, in about 20 years time, the area will be home to 12,000 people.
But with that many people living along 1.5km of coastline, Cockburn Mayor Logan Howlett said light rail must form part of the infrastructure transporting people in and out of the area.
"The City of Fremantle and the City of Cockburn believe light rail is essential for this development," Mr Howlett said.
"It will add value to the land, it will add value to those wishing to purchase property here and of course it will bring people from all over the Perth metropolitan area to an activity centre which will only grow."
Fremantle's deputy mayor Josh Wilson agreed light rail was needed.
"The Cockburn Coast development represents an enormous opportunity to create a community with great coastal amenity and a properly planned and resourced connection to a revitalised Fremantle," he said.
"That opportunity will be lost if the development is subject to the isolation and congestion that will inevitably result without the creation of a high-value, rapid-transit public transport corridor and matching infrastructure."
Mr Redman said a bus priority corridor along Hampton Road and through the Cockburn Coast Redevelopment would adequately service the area.
"There will only be three stops to ensure a rapid service," he said.