New Zealand Football World Cup project manager Peter O'Hara said Dunedin's new stadium was "really exciting" for New Zealand, and it would be a "fantastic venue for such a large sporting occasion."
O'Hara said Dunedin's participation would depend on whether its bid was received by the November 30 deadline.
He said 12 cities had shown an interest in hosting matches, but not all of those would put bids forward.
Dunedin Venues Management Ltd chief executive David Davies confirmed the stadium was interested in taking part in the event.
"We don't think our design is limited to pool games. We think we are suitable for finals".
He said Forsyth Barr Stadium, which hosted four games during the Rugby World Cup, was perfectly suited to large sporting events.
Davies said Dunedin had also shown during the rugby tournament it was "more than capable" of hosting a big sporting occasion.
Footballsouth general manager Bill Chisholm said he expected Dunedin to get some games.
Chisholm said the stadium was the best football venue in the country and he hoped the city would not be limited to pool games, but also host finals.
He said a committee comprising representatives of the Dunedin City Council, Dunedin Venues Management Ltd, Footballsouth and Tourism Dunedin had been set up to decide on a bid.
Committee chairman Dougal McGowan said the group was working "really hard" to ensure Dunedin was not just involved in pool games, but also finals.
The group would utilise knowledge gained from the Rugby World Cup.
He said the stadium was built for "exactly this type of event and we are looking to build on not just the success of the Phoenix but the popularity of football in general."
McGowan said once a bid had been lodged, New Zealand Football would announce its decision in February.
Tourism Dunedin chief executive Hamish Saxton said a major event like the under-20 World Cup was "totally desirable to Dunedin."
New Zealand hosted the under-17 World Cup in 1999, with Dunedin hosting pool games at Carisbrook. The last Fifa tournament to be hosted in New Zealand was the women's under-17 World Cup in 2008.
The under-20 World Cup is Fifa's second largest tournament, with 24 nations playing 52 matches. The tournament is broadcast in more than 200 countries and has a collective viewing audience of more than 25 million people.
In the past it has been a launching pad for such stars as Diego Maradona and current world footballer of the year Lionel Messi.
