Sydney's skyline will be dramatically transformed under a City of Sydney plan to send the central business district skywards, boosting the number and height of towers in the heart of the city and opening it to billions of dollars of commercial development.

Buildings could soar to heights of 310 metres, up from the current restriction of 235 metres, as part of a package that aims to lock in the city's economic future, encourage new commercial and retail spaces, and increase the supply of affordable housing.

The Central Sydney Planning strategy, which has taken the City three years to develop and is the most detailed planning review of the CBD in more than four decades, attempts to balance the city's residential property boom with the need to preserve and grow commercial, retail and cultural space.

The proposal would see "new tower clusters" emerge to reshape the city's skyline over the next two decades around Haymarket, the northern CBD near Circular Quay and to the west near Barangaroo.