Australia's last remaining 19th century city hotel is set to undergo a modern overhaul following VCAT's decision to grant an extension to the owner's planning permit.

The Victorian government has paved the way for a dramatic overhaul of one of Melbourne’s most historically significant hotels based on a design by local architecture firm Denton Corker Marshall (DCM).

The Halim Group, owner and developer of the Hotel Windsor, has obtained an extension to its planning permit for the heritage building from the Victorian Civil and Administrative Tribunal (VCAT), enabling work to proceed on DCM’s 2009 design for the site’s restoration and extension.

The proposed overhaul was left in a state of uncertainty when Victorian planning minister Richard Wynne refused to grant an extension to the permit that was originally scheduled to expire in January 2017.

While DCM first unveiled its design for the site back in 2009, and approval granted by then planning minister Justin Madden the following year, the state government subsequently demurred on the project. A leaked email indicated that Madden’s office planned to justify overturning the project by means of a contrived public consultation.

The latest VCAT approval extends the permit to 31 March 2020, providing the Halim Group with ample time for a project they expect to complete within a 36 to 42 month period.

The Windsor is one of Australia’s most important heritage hotels, as well as a landmark architectural site for the city of Melbourne. Situated on the corner of Bourke St and Spring St in Melbourne’s Parliament Precinct, the Windsor is Australia’s last remaining 19th century hotel in a major metropolitan area, as well as the only official “grand” hotel building dating from the Victorian era.

DCM’s design for the site will involve the restoration of the hotel exterior to its original condition, as well as the demolition and replacement of the rear section with a seven storey modern building described by the Melbourne architecture firm as a “perforated cube.”

The most dramatic aspect of the project, however, will be the addition of a 26-storey high-rise building to the rear of the original hotel, hosting 252 additional rooms as well as conference facilities and a 25-metre swimming pool.

Halim Group hopes that the overhaul will breath new life into the heritage hotel, which it previously expected to shut within several years’ time for sale or conversion into apartments.