Victorian Planning Minister Rob Hulls yesterday approved a proposal from the Corangamite Shire to rezone the land from rural to public use, allowing the cemetery to go ahead.

It was a victory for Palacom, a company made up of 20 investors from the region, who first floated the idea 15 years ago.

But opposition spokesman David Davis has warned Health Minister Bronwyn Pike to monitor the service.

"This is an experiment in terms of Victoria, we haven't had this form of burial before to my knowledge, and it's up to the Health Minister to monitor it," he said.

"We need to ensure there is proper security and ensure there is no confusion or lack of attention to detail."

Palacom managing director Tony Dupleix said the news was "fabulous".

"I just don't know what to think, we almost got to this point about two years ago, but were held up by bureaucracy."

Mr Dupleix said the cemetery offered a cheaper, more environmentally friendly burial.

"These days in Melbourne bodies are buried two or three deep," he said.

"Often you don't even keep your plot after 25 years."

Mr Dupleix said George Lines, a fellow Palacom member, had come up with the idea of vertical burials after hearing about a similar practice in the Middle East.

"At first I thought it was a little bit weird, but when I found out more about it, I thought it made sense."

Mr Dupleix said there had been mixed responses to the concept.

"Some people think it's downright abominable and other people think it's a great idea, and wonder why someone else didn't think of it first," he said.

Mr Dupleix said burials would cost about $1000, which was a "huge" saving.

"In New South Wales, the average cost of a funeral is $7000," he said.

Bodies would be held at a morgue in Melbourne and would be transported to the site for burial in batches of 12 to 15, to minimise costs.

The bodies would be encased in bodybags and buried in individual pre-drilled three-metre deep holes.

Plots would be identified by a bar code or a microchip system and the names of people buried at the site would be included on a board at the front of the site, 75km south-west of Ballarat.

The cemetery will be run by the Darlington Cemetery Trust.