"It will solely involve Putrajaya, not including Cyberjaya," he said.
Dr Mahathir was approached on the matter after opening the RM2.5-billion Megasteel Sdn Bhd, Malaysia's first hot-strip mill here Monday.
Work to transform Putrajaya into a federal territory would commence upon securing approval from the Selangor government, he said.
"We'll have to wait," the prime minister said.
Selangor Menteri Besar Datuk Dr Mohamed Khir Toyo had earlier disclosed that the state executive council will meet on Nov 7 specially to discuss Putrajaya's elevation into a federal territory.
On the possibility of the opposition making an issue out of the proposal, Dr Mahathir said for them anything could be an issue.
"Even if we were to give them (the opposition) one million ringgit, they'll come up and say..why not two million. The opposition is never thankful," Dr Mahathir said.
"You give them anything, they'll still criticise all the same. Everything is an issue," he said.
On the possibility of Selangor losing a few state legislature constituencies upon Putrajaya becoming a federal territory, Dr Mahathir said: "We can create other state legislative assembly seats as was the case when Kuala Lumpur became a federal territory."
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