Stirling Mayor Giovanni Italiano said he expected the project to generate 30,000 new jobs over the next 30 years, with up to $16 billion invested in the area.
Phase one will be assessed by a Joint Development Assessment Panel in coming months, with future plans already in the works, including a 30-storey, 350-unit residential building on the site's southern boundary.
Cr Italiano admitted the development would increase strain on Innaloo's road infrastructure but said it was up to the State Government to remedy the problem.
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READ NOW"By Westfield taking this step, it's going to send a direct message to the State Government that they can't sit on their hands any more, something has to happen in relation to traffic in the area," he said.
"This centre will put pressure on existing traffic issues but Im happy that this is happening because the State Government is going to have to make some hard decisions."
Parking at the centre will increase by more than 1000 bays to 3546, with plans to upgrade public transport facilities and pedestrian paths leading to Stirling station.
Parts of the northern end of the development will be set aside for residential development, with up to 150 units expected in two multi-storey buildings.
The development application estimated the floor space of Westfield Innaloo would be almost doubled from 51,300 sq m to 99,000 sq m.
Scentre Group development general manager Roy Gruenpeter said the development could result in up to 100 new retail stores, including several landmark brands.
"Westfield Innaloo is very well located, not only as a strategic metropolitan centre but certainly well placed in terms of it's demographic," he said.
The Stirling Times reported last week that the multimillion-dollar development would be re-oriented towards Ellen Stirling Boulevard.
Construction is tipped to begin in late 2016, subject to planning approval.