Performing "due diligence" and an assessment of the site will begin right away and cost about $5.5 million, he told assembled media at Queen's Park.
The goal would be to have the new site completed by 2017 in time for Canada's 150th birthday.
The old Ontario Place site was an amusement park for 41 years before the cash-strapped Liberals decided to shut it down.
The party then appointed a panel led by John Tory, the former leader of the Ontario Progressive Conservatives, to find ways to breathe new life into the site.
The site should provide an opportunity for people to live, work and play in year-round without having to pay for admission, Tory said then. Chan said the government would follow that approach, but said it was too early to get into details.
Tory's group's recommendations, released in late July, called for large portions of the now-shuttered amusement park to be converted to parkland, with private residences, a hotel and a resort complex all pushed as possibilities. The report said the site should be free, open year-round, and protect sightlines to the water.
"We see Ontario Place as a new public backyard for all Ontarians," Tory said at the time.
The panel also ruled out the possibility of a casino at the site. Chan said the government agrees with that as well.
"Let me say it again: No casino," Chan said.