Hi Chayse. Section 125 of the Australian Constitution specifies that the national capital had to be located within New South Wales, at least 100 miles away from Sydney. At federation in 1901, the search began for a suitable location for the national capital to be built. The site was chosen in 1908 and named Canberra in 1913.
You can find out more about the choice for the location for the national capital and the building of Parliament House with this resource on the PEO website.