Reverend Kim Cain said a change in the global economic environment would make it a challenge to sell office suites within the glass tower it planned to build on the site.
Funds from the sale of office suites would have been used to restore other buildings on the site including the Church, Nicholas Hall, a manse, schoolhouse and caretakers cottage.
Reverend Cain told The Age the Church plans to propose a new development which may include more residential and retail space, but less offices.
He expects the revised development to be similar in height to the previous proposal, and is still hoping to start construction by mid-2010.
Any revised plan is still expected to see the demolition of the historic Princess Mary building, at 118 Lonsdale Street.