Big plans to revamp Melbourne's Queen Victoria Market will be unveiled on Tuesday, with a proposal to replace the car park with a large public plaza and carve off a slice of land for development.

Melbourne City Council will announce five key concepts for the $250 million makeover, following initial community consultation.

Under the plan, the former Old Melbourne Cemetery and existing car park will be turned into a large public space. New basement car parks will be built beneath three northern sheds, along with possible storage facilities.

Queen Street at the eastern entrance will be closed to cars and a stretch of Franklin Street rerouted for more direct traffic flow to and from the city.