The Queensland government has partially approved a controversial development after revisiting the permission granted by Brisbane City Council.

The Cedar Woods project at Upper Kedron, in Brisbane’s northwest, involved the planned construction of 780 residential lots with an option of a further 200.

Despite promises of a $900 million boost to the Queensland economy and the creation of 1000 construction jobs, it was opposed locally because of a perceived strain on existing infrastructure and services.

In April, Deputy Premier Jackie Trad vowed to reassess the development application to make sure it struck the right balance between the environment, the economy and local community concerns.

Ms Trad announced on Friday evening she would offer preliminary approval to 480 lots, but accused the council of failing to properly assess the application against its own planning scheme.

“It has become clear that the Brisbane City Council planning framework for the site has been fundamentally deficient,” she said.

“(It) does not provide an appropriate basis on which to make long-term development decisions for this area.”

Local opposition to the development was a key platform for Education Minister Kate Jones in her successful campaign against former Premier Campbell Newman in his seat of Ashgrove during January’s election.

Ms Trad will issue a formal direction, under planning legislation, calling for updated planning in the area by the council.

Independent studies had identified the site’s potential, but the current Brisbane City plan did not address the matters adequately, she said.

“Good planning and real engagement with the community is required to resolve these major deficiencies.”