A-League confirms two new teams: Western Melbourne and South West Sydney

Australia's top club competition, the A-League, will expand to 12 teams by 2020 with a team based in Western Melbourne joining next season, Football Federation Australia said on Thursday.

A side based in South West Sydney will join the competition for the 2020-21 season, giving Australia's two largest cities three clubs each.

The two expansion teams were selected from an initial field of eight bids, which was narrowed to six in October.

"There was broad agreement that expansion should occur at the earliest possible opportunity, provided it is sustainable and underpins the continuing growth of the A-League," FFA chief executive David Gallop said.

"The successive entry of new clubs in Western Melbourne and South West Sydney respectively delivers this outcome."

The team from Western Melbourne have proposed building their own stadium, Gallop said.

"The prospect of a facility owned by football for football will be a significant new milestone for the game in Australia," he said.

"Football-specific stadia have been extremely successful in league expansion in other parts of the world and we are excited by the prospect of such a facility in Melbourne."

The Sydney Morning Herald reported earlier on Thursday that until the new stadium was built, the Melbourne team would play their home games in Geelong.

Melbourne's two other side's, City and Victory, mostly use a stadium that also hosts rugby league and union matches close to the city's central business district.

Both successful bids have been placed in areas of fast-growing population, with soccer competing with three other football codes -- rugby union, rugby league and Australian Rules -- in Australia's crowded sporting marketplace.

The A-League currently consists of 10 teams, but the licence of the New Zealand-based Wellington Phoenix will be reviewed at the end of the 2019-20 season.

The club was granted a 10-year extension to its licence in 2016, contingent on them hitting certain performance targets around crowd attendance, financial contributions and broadcast revenue by the end of the 2019-2020 season.