The proposals from transport authority Centro would see the tram system travel through Paradise Circus and up to Centenary Square.
Balfour Beatty is already extending the system to connect the city’s two largest railway stations, New Street and Snow Hill, and beyond to the historic Jewellery Quarter and the Black Country by 2015.
The new proposals, drawn up in partnership with Birmingham City Council, would provide further connections to the International Conference Centre, Symphony Hall and Birmingham Museum and Art Galleries.
Public consultation on the proposed extension is being held from now until the end of September.
Centro has already received approval to integrate the system with the Paradise Circus redevelopment but is proposing to amend the route to eliminate the need to build a bridge over the Suffolk Street Queensway tunnels.
Centro aims to submit an application to the government before the end of this year for a supplementary Transport and Works Act Order that would grant the legal powers needed to build and operate the extension.
If granted, work could start could start in 2015 and be open for public use in 2017.
Cllr Roger Horton, Centro’s lead member for rail, said: “Work is already underway to connect the Midland Metro to both New Street and Snow Hill stations and we want to build on that and further improve the network in Birmingham city centre. These plans would play a significant role in supporting some of the major redevelopment work taking place in the city which will bring about an extra £2bn for the economy and create up to 40,000 jobs.”