Prime Minister Anthony Albanese has backed the prospect of an AFL team in the Northern Territory, but has stayed tight-lipped on whether his government would help fund it to get off the ground.

With a 20th AFL licence up for grabs, the NT has been touted as one of the top options to take it home, with Western Australia and the ACT also billed as possible contenders.

It comes as Tasmania prepares to enter the AFL with the Devils in 2028, bringing the competition a step closer to becoming truly representative of each state and territory.

This year's Tiwi Islands grand final marks the first time a sitting PM has ever attended the iconic match. (ABC News: Pete Garnish)

Despite being known as a breeding ground for some of the competition's most exciting talent, from regions like Gove and the Tiwi Islands, the NT has never had a top-tier team.

Mr Albanese visited the Tiwi Islands on Sunday, the first time a prime minister has travelled to the islands north of Darwin in more than 25 years, where he voiced his support for an NT team.

"I'd love to see a team here in the territory, as I'm sure all Territorians would," he said.

"It's a while off, [but] we'll continue to talk and engage with the AFL as well."

Anthony Albanese met with local players at the Tiwi Islands grand final on the weekend. (ABC News: Pete Garnish)

Mr Albanese was asked whether the Commonwealth would help finance an AFL team in the NT as it has done to help create an NRL team in Papua New Guinea.

"I don't run the AFL, so I'll wait, and certainly any submissions from the AFL [for funding] would be welcome," he said.

"We'll engage constructively with the AFL as well.

"The Northern Territory has a great history of producing great footballers."

'We have the raw talent'

Reacting to the prime minister's comments, Northern Land Council (NLC) chair Matt Ryan said an AFL team would bring huge social benefits to the jurisdiction.

The AFL is considering a range of measures to boost the number of Indigenous players in the league following a significant decline in recent seasons.

"We have the raw talent, and I think we can do it," he said.

"I would push that 100 per cent."

When asked if the NLC would be prepared to consider helping with funding the establishment of a team, alongside possible federal financial support, Mr Ryan said, "I think we should all chip in".

"It's our team and I think we should sponsor or support them," he said.

Mr Ryan said he believed the establishment of an NT team would help offset the falling number of Indigenous players in the league.

Tiwi Islands women's footy player Mara Munkara, who played in the weekend's grand final, said an NT team would "mean a lot to the Tiwi people".

"It could bring excitement, everyone happy, everyone around Northern Territory," she said.

Mara Munkara says an NT AFL team would bring a lot of excitement to the Territory. (ABC News Pete Garnish)

A task force has been formed in the NT to try to build the case a local team to be created.

A business case published in 2024 included the recommendation for the federal government to fund construction of a new stadium in Darwin's CBD, to help bolster the jurisdiction's chances for a team.

The AFL has been contacted for comment.