Melbourne is poised to get new rules for the protection of heritage buildings, in a move heritage advocates hope will help save historically significant places from the wrecking ball and end the trend of "facadism".

Under a review of the city's heritage planning policies, Melbourne City Council is preparing to phase out the old system of the A, B C or D grading of heritage buildings. Critics say a D grading often meant "D for demolition" for developers.

The Rialto towers retained key parts of the original buildings. Credit:Chris Hopkins

A prime example is the Palace Theatre in Bourke Street, which was originally graded D under the system. There has been a long-running battle to the save the historic building from demolition to make way for a new hotel. The matter is now before the Victorian Civil and Administrative Tribunal.

The council is looking to adopt a new system where buildings that have enough heritage value are graded as either significant or contributory, bringing the city into line with state government requirements.