Victorian Planning minister Richard Wynne said he would approve a scaled-down version of Cbus property's $1.25 billion development at 447 Collins Street in Melbourne’s CBD.
After negotiations, Mr Wynne has told Cbus Property he will accept a project 21.6 metres shorter in height than first proposed to reduce overshadowing over the Yarra River.
The developer will now submit amended plans before a planning permit is granted.
The proposal, which takes in an entire city block, includes office space, apartments and a hotel.
Mr Wynne said the government had taken the time to make sure it provided for a future landmark on Collins Street.
“I have approved $5.7 billion worth of inner city developments and will continue to push for quality design which adds to the liveability of our city," he said.
“I judge every project on merit and make sure what is built does not negatively impact the surrounds, I want to encourage new towers without sacrificing amenity.”
The developer also wants to transform part of Market Street into parkland, creating new public space in the heart of the CBD.
The Andrews Labor Government’s planning policy supports inner-city development which contributes to the city, while protecting the amenity of the Yarra River.
Melbourne is attracting widespread investment and the Labor Government is working to make sure the city maintains its liveability through smart planning.