The creation of a new mini suburb comprising 2500 homes to built on the old Amcor paper mill site in Alphington has been ticked off by an inner city council.

Yarra Council passed a resolution on Wednesday night giving the green light to a revised development plan for the 16-hectare site which would house up to 5000 residents.

A sketch of the development at the Alphington paper mill site.

The plans had been the subject of community consultation, which Yarra mayor Roberto Colanzi​ said resulted in a series of amendments to the original plans.