Lend Lease Ltd has been honoured as the winner of the Western Australian government's $1 billion-plus Alkimos coastal city project, beating Mirvac Ltd and a consortium led by Satterley Property Group Ltd.

Lend Lease revealed on Wednesday that the 2500-dwelling first stage would be take over seven years to complete, beginning in 2011, with the company feeding in $20 million for the project.

The first stage of the project is expected to cost around $400 million.

Shares in Lend Lease rose during morning trade, climbing 5.49 per cent to $9.99 at 1220 AEDT, against a benchmark index up 0.7 per cent.

The Alkimos development will bear 10,000 homes developed over 20 years on the coastal site 40km from the Perth CBD, including vast initiatives making it more sustainable.

It will include environmentally-sensitive design, recycled water use, education partnership models and local job creation initiatives.

Lend Lease claimed its subsidiary, Delfin Lend Lease, would sign a development agreement with the WA government's land development agency, LandCorp, within the next three months.

The Alkimos project is widely hoped to grow dramatically, setting benchmarks in sustainable community development through planned designs, as it is one of the last undeveloped metro areas along Perth's coastline.