Only two original buildings fronting Spencer Street, and a historic water tank, will be retained as part of the redevelopment.
The rest of the block will be replaced with shops, offices and some 2500 apartments, able to accommodate more than 7500 residents – or the population of a small suburb.
Construction is expected to start within weeks.
The north-west corner of the CBD is seeing a wave of development activity at the moment, with high rise buildings also earmarked for parts of the old Age site, across the road from Upper West Side.
Major residential and office buildings are also planned on the Docklands-side of the Southern Cross train station, where amongst others, heavyweight developers Charter Hall, Lang Walker, Lend Lease and Mirvac own prime sites.
Far East wasted no time marketing Upper West Side apartments, settling to buy the property in February, and advertising flats for sale in June – and before obtaining a tick from Minister Madden.
Between 2005 and early 2009, the site was owned by Russian businessmen, who proposed a similarly high density redevelopment, but had no luck finding a major office tenant to help fund the wider project. Far East paid $33.1 million for the site.
In a show of how fast values have moved at the western edge of the CBD, the Melbourne City Council sold the then-contaminated power station site to developers for $4 million in 2002, and after it languished on the market for more than a year.