Holroyd council's swimming pool committee is expected to present a special report on the proposed Merrylands pool to council early in March.
Aldermen hope to begin work on preliminary plans and drawings this year.
Construction of the pool could start some time next year.
Town Clerk, Mr. P. A. Arnett, said the committee is now compiling a special report for council.
"It is expected to make a recommendation to council within three weeks.
"Aldermen are hoping for a favourable report from the committee as to the pool's location and finance for the construction." he added.
The exact site for the new pool has not been decided yet, but Merrylands Park is being considered.
The new pool will be built serve residents in Merrylands.
Council's overall swimming pool plan also provides for the future construction of a pool in the Guildford area to serve residents there and in Yennora.
Mr, Arnett said council also hoped to make a start on preliminary plans and specifications this year.
"Construction could then start next year," he said.