This week Melbourne City Council will unveil proposed new planning rules for the market area, including for two council-owned sites already earmarked for "mixed-use" residential development.

There will be no official height restrictions for future apartment buildings on these blocks, according to the proposal.

Instead the height of towers will be limited largely by rules that prevent the towers significantly overshadowing Flagstaff Gardens and a large park or piazza that will replace the market's current car park.

Lord mayor Robert Doyle said these new taller buildings could provide, for the first time, a defined "edge" to the northern part of the CBD.

"Previously the market has been like a shallow bowl down one end of the city," he said. "There is no real sense of where the city ends and where the market begins."

A major construction boom is already well underway around the market. CBRE's Mark Wizel​ said the area was "without doubt the most successful apartment precinct in Australia at the moment".

"There is a crane on ever corner," he said.

Within just 100 metres of the market more than 12,000 units have been built or are planned, according to Cr Doyle.

However, although a number of towers more than 70-storeys have been approved or are under construction in the vicinity, it is unlikely that any development on land currently owned by council, and adjacent to the market, would be quite that tall.

Victorian president of the Australian Institute of Architects, Peter Malatt, said the towers could be economically viable at 50-storeys. But he said planners should be more concerned about what these buildings would look like at street level, where they could have a significant impact on the "sensitive" market precinct.

"What we want is small shops … not a bunch of driveways," he said.

Market traders have already been over the 'larger picture' of proposed changes, a trader representative said. 

The two pockets of land owned by council are the 6500-square-metre Munro site to the east, and block at the southern end of the market which was given by the state government to help council fund the redevelopment

Any new tower on these blocks would have to abide by a number of design guidelines governing minimum space between towers, sunlight and outlook.

The final master plan for the market is scheduled for release in July or August, with construction works to begin in the middle of next year.

Cr Doyle is confident there is now widespread public support for the key elements of council's plan for the 137-year-old market, which includes a push to radically expand its operating hours.  

Queen Victoria Market trader representative Greg Smith said traders had already been over the "larger picture" a number of times and now were hungry to nut out the smaller details likely to have the most impact on their businesses.

About $80 million will be allocated by the council in the coming financial year to help pay for the $250 million market renewal. All but about $4 million will go to pay for the council's $76 million purchase of the Munro block late last year.

The council has also forecast a budget surplus of $42 million over the next four years, which will be diverted to fund the revamp.