John Thompson and Partners, PRP, PCKO and Tiballds TM2 beat off competition from 30 rival architects. The shortlisted practices will each draw up a masterplan for the 20 ha greenfield site, which will be an expansion of the existing Pan housing estate.
The council is hoping the scheme will set a standard for high quality housing on the island. The successful practice is expected to be selected by the council at the end of May.
The council said it is looking for an architect with a background in public consultation, and has put an emphasis on social inclusion and the needs of pedestrians.
The council has called for good bus, cycle and pedestrian links and good access to the town centre and employment facilities to be incorporated into the masterplan. It also said that it expects the local community to be consulted extensively on these issues in the preparation of the masterplan.
The Isle of Wight does have housing problems and rundown estates
A council spokesperson said the new estate would hopefully be a step change in the design of housing estates and be an exemplar for other developments.
He said: "It is unfortunate that many new housing developments on the island have been of unexceptional suburban character, with few associated community facilities or shops and poor access to public transport."
The spokesperson said that this approach has done little to engender community identity or quality in urban design.
An architect from one of the project teams said: "Most people think of the Isle of Wight as a nice place to go on holiday. But it does have housing problems and rundown estates just like more urban parts of the country."
The council wants a high proportion of the new development to be allocated for affordable housing. Housing associations could develop rented homes, or private developers could sell homes to registered social landlords at 50% of market value.
The shortlisted architects have has been urged to incorporate innovative and experimental designs into the scheme.