A massive apartment development with an expected population of a small regional city has been approved on the site of the former Age building on the corner of Spencer and Lonsdale Streets.
There will be almost 3000 apartments in six towers of up to 63 storeys housing more than 5000 residents when completed.
The unnamed development by super fund developer ISPT is expected to take more than a decade and be worth $800 million.
Planning Minister Mathew Guy today approved the development proposal on one of the CBD's largest development sites, covering 1.2 hectares.
The approval follows a string of large apartment tower approvals by Mr Guy, but the planning minister denied he was modelling Melbourne on Hong Kong or Manhattan.
"Melbourne has a character unto itself," he said.
"I don't think we should look around the world and say we want to be like Helsinki, Hong Kong or Manhattan or London, Melbourne is a city of four and half million people and we need to play to its strengths," he said.
He said the government was working on delivering more community infrastructure for the city, including exploring the idea of high rise or vertical schools.
"That concept is one the government has been exploring with its Fishermans Bend urban renewal precinct," he said.
Sean Hogan from ISPT said few would miss the old Age building.
"The building doesn't have any fans ... this is probably the last industrial part of the Hoddle Grid," Mr Hogan said.
Mr Hogan said the massive development would be staged over eight to 12 years and the demolition and clean-up of the site would take more than a year.
He said the apartments would be of different sizes and adjust to market demands.
Mr Hogan said he was "looking forward to finding out" market demand for the apartments.
He said they were taking a long-term view of the project and it was unlikely to be going to market in the next six months.
There have been concerns the approval of new apartment towers in Melbourne is outstripping demand, with some predicting oversupply by 2014 and discounted rents.
Almost 8000 apartments are proposed for the pocket of the city bounded by La Trobe, William, Bourke and Spencer Streets, including 2543 across the road from the old Age building on the former power station site on Lonsdale Street, where construction is well under way.
Demolition and clearing the former Age site is expected to take more than a year, including the clean-up of old fuel storages and asbestos.
Associate professor in environment and planning at RMIT, Michael Buxton, said the towers were a bad planning outcome for Melbourne.
"There is no strategy other than relentless promotion of high-rise growth," he said.
"It is world's worst result, we don't need this kind of remorseless over development any more in the CBD," he said.
"It leads to a windier city with people removed from the street," he said.
Opposition planning spokesman Brian Tee said it was time the planning minister did some planning.
"All this minister knows is approving tall towers, there is no plan to enhance or protect Melbourne's liveability, which is at risk," he said.