The Municipality has to allocate a new site for a tertiary treatment activated sludge to handle 1 million m3/day (264 million gallons/day).
What is the minimum area needed to provide tertiary treatment for such a plant including sludge treatment.
Difficult to answer your question directly. There is no "standard" size. You may have to survey similar plants in your area which should give you a pretty good idead of about how much space may be needed for a 1 MGD plant. You may also find some information from the US EPA Regional office including a rough idea of construction costs.
If this sizing figure is Average Dry Weather Flow, you are talking about a very large plant. 1000ML/day ADWF is equivalent to the load from a city of around 4 million people. Is this correct?
I strongly suggest you engage a consultant to prepare you some concept layouts for a plant this size, as there could be big differences in footprint, depending on the process selected.
It seems you will have some very important land acquisition issues depending on the answer!