Councillors unanimously approved the Lyons Street North development at Wednesday night's council meeting, despite some voicing concerns around the height of the development and loss of heritage.

The development was touted by councillors as being an example of good design principles featuring a focus on carbon neutrality and sustainability.

Committee for Ballarat chief executive Michael Poulton said the project was a significant step for the city and revitalising the CBD.

"For a long period, we've talked about bringing people back into the inner city and at least starting to supplement the urban sprawl with inner city development and I think this is a great statement to developers and others that inner city development is not only possible, but it can be exciting," he said.

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"I think the project really lifts the bar on design and is going to challenge any further inner city developments to do the same.

"This is not just a seven-storey box, it's an impressive testament to contemporary design featuring carbon neutrality and sustainable living that I think people now are expecting of cities."

While the development raised the familiar concerns around heritage that most developments in Ballarat tend to attract, Mr Poulton said this project actually complemented the heritage of the inner city.

"I don't see this as something that is going to stick out, it's actually going to complement the surrounding heritage and in a city like Ballarat, we always have to balance the past with the future and I think this building will do that and I think it will really open up opportunity for further buildings to do the same into the future."

Council also granted the development a reduction in parking requirements with 55 spaces allocated to 59 apartments and three townhouses, but did so after the inclusion of apartments without car parks proved successful with the Nightingale development at Davey Street.

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Mr Poulton said infill development projects were crucial to continuing the city's growth without continuing the urban sprawl to the west and south.

"We need a diversity of housing stock and, at the moment, the population growth is pushed to the outer fringes of the city because there aren't other alternatives," he said. "It is so important to the growth of the city and, importantly, to bust some of the congestion issues that we start bringing people back into the city who don't need or don't want a car to drive everywhere.

"We haven't seen enough of that in the inner city and the more we get, the more demand you build, the more people you're bringing to the city and the more activity and vibrancy you bring into the city and that's crucial to the revitalisation of not only our economy, but also the feeling and the vibe that our city has."

City of Ballarat chief executive Evan King said the decision was an important one to help spur further infill development.

"It's a block of land that's been sitting there, it's been an eye sore for a very long time. We've had a great proposal that's really thought through all of the implications from heritage to height to sustainability to parking, all those sorts of things, and council unanimously supported it," he said.

"I think it's a great message to the community that Ballarat is really genuinely interested in infill and how we stimulate it. We're talking about stimulating hospitality, the other way of stimulating hospitality is actually getting people living in the CBD within walking distance of all these great facilities. I think it's a really, really important decision of council."

However, a leading planning expert said council needed to be careful about preventing high-rise development from getting out of control.

RMIT University emeritus professor in environment and planning Michael Buxton said Ballarat's infill development should limit outer urban sprawl, but also be consistent with Ballarat's heritage and amenity.

"If infill conflicts with Ballarat's greatest asset, which is its heritage and amenity, then eventually it will help destroy the very thing that makes Ballarat an outstanding national asset," he said. "The problems with seven-storey development in Ballarat are obvious. If it continues, it will create a precedent for even higher development. Seven storeys won't be the end, it'll be the beginning.

"The critical issue here is that council needs an infill plan. What we've learnt in Melbourne is that if you have discretionary planning zones, like discretionary height controls in this case, and you don't have a plan and you don't have proper regulatory controls, you open yourselves up to the mercy of the market and developers will take advantage of that."

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