A controversial multi-tower development at Flemington Racecourse has been approved by the state government, provided the height of its four towers is significantly reduced.

Planning Minister Richard Wynne announced on Saturday he had agreed to the planning scheme amendment for land owned by the Victoria Racing Club on the edge of its famed racecourse.

An artist's impression of planned apartment towers next to Flemington Racecourse railway station.

The rezoning will allow the VRC to go ahead with four towers, one on Epsom Road and three in Ascot Vale, on land it says is ripe for residential development.

But the state government said the height of the towers will have to be drastically scaled back.