Two 79-storey towers have been approved for development in Melbourne's CBD, the State Government says.

Planning Minister Richard Wynne said the $750 million two-tower project has been approved for construction at 350 Queen Street near the historic Queen Victoria Market.

Almost 1,600 apartments and 8,000 square metres of office and retail space will be included in the 268-metre development, the government said.

Mr Wynne said the towers would include a mix of one- to four-bedroom apartments.

"This is quite unique for the central city of Melbourne and it speaks to the change in demographics," he said.

"No longer do we have couples or downsizers wanting to live in apartments in the CBD, we actually have families who want to live in apartments in the CBD and Docklands as well."

He said the government was now looking at areas in the Docklands to build schools.

Towers won't 'mimic Manhattan'

Mr Wynne said the two towers were not designed to "mimic Manhattan" and rejected suggestions the towers could contribute to an apartment glut in the city.

"We do not have an apartment glut and this is a development that is actually catering for families," he said.

"It speaks, I think, to many families who are using the opportunity of apartment-style dwellings.

"While there is mixed views about an oversupply, we have no evidence to that effect."