A six-figure sum will be paid in compensation for the destruction of a "famous" native tree that will be felled and turned into park furniture to make way for the CityLink Tulla widening project.

Regular travellers from the airport will probably recognise the enormous lemon-scented gum on a median strip on Flemington Road, just down from the off-ramp which passes by Melbourne's iconic "cheese sticks".

This month Parkville residents were shocked to receive a letter saying the 94-year-old tree would be cut down.

Some neighbours, including 70-year old Ann Read, have vowed to chain themselves to the tree in the event the chainsaws move in. "A few battles have been won by that technique," she said.