The Garden Island naval base is the favoured location for a second passenger cruise ship terminal in Sydney Harbour, according to the NSW Planning Minister.
Ms Keneally has set up a Passenger Cruise Terminal Steering Committee to explore various sites for an additional location for ships to dock.
"Ships are getting bigger, particularly ships which perform round-the-world trips, whose operators often only want to make one stop per country," she said. "We want to make sure that stop is in Sydney."
The NSW State Government is currently planning for the required infrastructure to be in place, such as extra public transport and tourist facilities.
At last week's Tourism and Transport Forum National Hotel and Tourism Industry Policy Summit, Ms Keneally announced the formation of the cruising committee, which will examine the future needs of the cruise ship industry.
"More people are forecast to travel on cruise ships and the ships themselves are getting bigger, which means they can't get under the Harbour Bridge," she explained.
"It is my intention that the Committee would advise on White Bay, as well as sites on the eastern side of the Harbour Bridge, such as at Garden Island."
Ms Keneally said she wanted the Royal Australian Navy to be part of these discussions, with a view to providing cruise ship access to Garden Island "under a more permanent arrangement than is currently in place."
Australia's largest cruise company, Carnival Australia, welcomed the move to establish a committee.
"We have been raising our concerns about the lack of facilities for almost 12 months now and are relieved that Minister Keneally is committed to finding a solution given the huge and sustained growth in cruising," said Carnival CEO Ann Sherry.
Peak industry group Cruise Down Under described the formation of the committee as "a major step forward".
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