Organisers said on Wednesday they may switch the Australian Grand Prix to a dedicated circuit to keep the race after the expiry of its current contract.
Australian Grand Prix Corporation chairman Ron Walker has identified a site for a purpose-built track at Avalon on the southwestern outskirts of Melbourne.
The Australian race has been staged on a street circuit in Albert Park on the fringes of Melbourne's city centre since 1996, but mounting financial losses have raised doubts about the future of the event.
Organisers have a contract with Formula One ring-master Bernie Ecclestone for an Australian race in Melbourne until after 2015, but a new permanent circuit is viewed as one way of keeping the event.
Last year's Melbourne race posted its biggest loss in five years, costing taxpayers in the state of Victoria nearly $50 million, which prompted Melbourne Lord Mayor Robert Doyle to call for the event to be scrapped.
In response, Ecclestone said: "If we have some new races, some others will fall out -- we don't need Australia, for instance."
Walker said he would approach the Victorian state government after this weekend's Australian GP to investigate the possibility of moving the event to Avalon.
"Now that Mr Ecclestone has raised the issue again, maybe we might go to Avalon and look at the plans," Walker told the Autosport website on Wednesday.
"It is a lot of money to build it, but then again the government has Aus$1 billion invested in the (Melbourne) Tennis Centre."
"If you take the interest rate of that, it is slightly more than the grand prix costs. So, there are various ways of cutting the cat.
"It would take about three years to build, and the decision would have to be made next year, or as part of the new contract from 2015 going forward. It is something that we will raise with the government very soon after the race."
Walker said he was confident the Australian GP would continue beyond the contract date.
"I think it is very secure," Walker said. "There is a five-year option there that goes either way, and Mr Ecclestone recognises that this is a great city to come to.
"It is like Montreal. They lost it, and then they turned around and wanted to get it back. It is one of these things that advertises the city on free to air television... it is an amazing sport to help publicise the city."