Confused motorists have been forced to dodge a tree, planted in the middle of a busy Melbourne road by an inner-city suburb's council.

Drivers and cyclists were seen swerving around the sapling in Collingwood's Mater Street, coming dangerously close to cars parked on the side of the road.

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A Yarra City Council spokeswoman says the placement of the tree was designed to "calm" traffic in the suburb.

However, locals say they're concerned the tree will become a hazard when it grows larger.

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It mirrors an incident in Newcastle last month in which road workers forgot to remove a power pole from the middle of the road.

The works were carried out to widen the road and, while the kerb was moved back, nobody thought to move the power pole with it.

Bright orange fencing was set up around the hazard to prevent drivers from hitting it.