Football Federation Australia chief executive officer David Gallop, talking at the AAP Sports Editors Conference, said up to 700 clubs around the country could take part in the competition.

"There are people at the FFA working on it now," he said.

"There will be six or seven hundred teams involved and we all know about the FA Cup, we all get up for it, the chance for those [smaller] teams to come through.

"The grand plan is to hold an Australia Day grand final of the FFA Cup."

The tournament is likely to start in April 2014.

The FFA Cup would also maintain Australian football's presence during the winter months, in order to continue the sport's increasing popularity throughout the country.

"We all grew up getting up at night to watch the FA cup, dreaming of maybe playing in it, so we know how exciting a cup competition can be," Gallop said.

A-League teams enter the competition in September or October, around the same time as the beginning of the A-League season.