Berlin's iconic Checkpoint Charlie will undergo a drastic facelift after the city government reached consensus on moving forward with a contested redevelopment plan on Tuesday.

The former border crossing once divided the city into the communist East and the democratic West.

After German reunification in 1990, though, Checkpoint Charlie has become a tourist destination, dubbed by locals as a "historical Disneyland." The area features an, at times, jarring mix of public and private memorials and museums and welcomes thousands of visitors every day.

Read more: Berlin bans Checkpoint Charlie 'soldiers'

In November, local authorities put a stop to actors dressed up as US soldiers posing for selfies at the site.

New plans, produced in consultation with Berlin residents, would transform Checkpoint Charlie from chaos into a public square with a Cold War museum and a residential block with roughly 300 apartments, some earmarked for social housing.

"With the involvement of citizens, tracks have been laid for a future-oriented development for this special place," said Berlin's urban development senator Katrin Lompscher in a statement on Tuesday.

Roughly one thousand tourists per day visit Checkpoint Charlie.

The redevelopment of the 1.3-hectare (3.2-acre) area has been the subject of controversy. Last year the city of Berlin rejected plans from one developer to build offices and open a Hard Rock hotel near the site.

Read more: Tourist trap and memorial: What is to become of Checkpoint Charlie?

Since then, however, Left party politician Lompscher's plans have been criticized frequently. The ruling coalition is dividedas to whether to allow the construction of two skyscrapers at the site, and while the skyscrapers haven't made it into the current plan, there is a possibility they could be developed over 30 meters in height later. The debate echoes Germany's wider existential crisis about whether or not to expand upwards as pressure on accommodation soars as the country's population has grown by tens of thousands annually in recent years.

Despite a sustained disagreement amongst the city's government, the executive approved the plan for fear of allowing the private sector unrestricted rein when a temporary development freeze on Checkpoint Charlie expires early next year.

The city's parliament is expected to vote the plan through before February, though when work will begin on the site remains unclear.