The federal government's Smart Cities Plan will position Australian cities to succeed in the 21st Century economy.
Assistant Minister for Cities Angus Taylor said the "National Cities Performance Framework" will not be about ranking cities but enabling cities to beat their "personal best".
"An important way we can improve the performance of our cities is by measuring their progress on key indicators – population growth, land use, society, the economy and the environment," he said.
"Working with stakeholders, we will get a set of meaningful indicators which we will publish, allowing all Australians to see how well our major cities are working.
"This is not ranking city against city; it's about encouraging individual cities to improve outcomes against benchmarks, to keep delivering new PBs, if you like.
"If you can't measure it, you can't improve it."
The framework was launched last week following a Smart Cities Summit in April 2016 and extensive consultation with industry.
The government received over 130 submissions. As a result of these submissions the government will begin work on its Smart Cities Plan in 2017.
Green Building Council of Australia CEO, Romilly Madew said the National Cities Performance Framework will ensure governments get maximum value from investments in infrastructure and urban renewal across Australia.
“While governments are routinely criticised for the high cost of infrastructure and poor cost-benefit ratios that inform investment decisions, it is time we move beyond these simplistic measures of performance," she said.
"Instead, we need to understand how we are making our communities better places to live.”