Planning Minister Richard Wynne announced on Saturday he had agreed to the planning scheme amendment for land owned by the Victoria Racing Club on the edge of its famed racecourse.

The rezoning will allow the VRC to go ahead with four towers, one on Epsom Road and three in Ascot Vale, on land it says is ripe for residential development.

But the state government said the height of the towers will have to be drastically scaled back.

The VRC's most recent plans included three buildings ranging from 14 to 25 storeys and one tower of 31 storeys, with 1138 apartments between them.

Mr Wynne said the 31-storey tower planned for land on Epsom Road would have to be reduced to 15 storeys, and the three buildings in Ascot Vale could be no larger than 10 storeys.

The state government's approval follows a report from an independent advisory committee it appointed to oversee the contentious proposal.

In its final report on the matter, released on Saturday, the committee found the two sites appropriate for a residential development even though the Epsom Road tower was outside any designated urban renewal area and the three buildings near the racecourse railway station could not rely on the train line being used for commuter services.

The committee advised a maximum height of 14 storeys for the Ascot Vale buildings and 15 storeys for the Epsom Road tower.

Mr Wynne said the state government had listened to the local community and the advice of the advisory committee, "who told us the original proposals submitted by the VRC were too high," he said.

The minister said the state government had gone further than the advisory committee's recommendations for the height of the Ascot Vale buildings by placing a cap of ten storeys, to ensure they didn't overshadow the VRC's famous spectator grandstand.

On Saturday, Public Transport Minister Jacinta Allan confirmed there was no capacity to run regular trains services on the Showgrounds/Flemington Racecourse line, which currently only operates on race days and special events such as the Royal Melbourne Show.

"Flemington is also serviced by trams and buses, and we'll continue to monitor patronage and improve services as the area grows," Ms Allan said.

Opposition Planning Minister David Davis questioned why the state government had approved the planning mechanisms for the development, but not ensured there was adequate public transport to support the thousands of residents who would move in.

"Where are the services to support this intense development? You can't stack tens of thousands of people there without providing the additional services to support them," he said.

The City of Moonee Valley, whose municipal boundary extends beyond the proposed Ascot Vale towers, said he was please the height and density of the development had been scaled back, but wanted traffic bottlenecks addressed, particularly at the Racecourse and Epsom roads roundabout.

The City of Melbourne has previously described the proposed towers as too high, too dense and lacking strategic justification. The council has jurisdiction over the planned Epsom Road tower.

VRC chief executive Simon Love said the club would study the advisory committee's report before deciding its next steps.