When former planning minister, now Opposition Leader, Matthew Guy approved the original design, officers at the planning department found that it would create a "simple but compelling landmark building".

The new plan for the site, however, will create a far simpler tower that is likely to be regarded as just another CBD tower.

The skyscraper to replace the "Jenga tower" will include more than 600 student apartments and 142 "city living" units for short stays.

They will be operated by accommodation provider Scape, which is planning to build hundreds of student apartments in Melbourne's CBD. Scape has student accommodation projects in Sydney and Brisbane too and has established itself as a big player in the fast-growing sector.

The proposed Franklin Street building breaks new rules for towers set last year by Planning Minister Richard Wynne because it is too dense for the site, but the developer can bypass this by offering office space in the building's lower levels as a "public benefit".