A $350 million residential development in Melbourne's Fisherman Bend has won approval as the state government steps up it's planning for the vast urban renewal zone south of the city.

The three-tower project proposed by private player Third Street is the largest development so far in Wirraway, one of of five distinct precincts in Fishermans Bend.

The precinct is the closest to Port Melbourne and its bayside beach. Most proposals have been clustered in the Montague precinct, nearest the city.

Designed by architects Elenberg Fraser, the project has been dubbed P.M. The first tower, to be known as P Residences, comprises 180 one, two, and three-bedroom apartments and will be released early next year.

Third Street founder David Joachim said the project has an amenity ratio of seven square metres per apartment, much higher than the typical amenity ratios at one to two square metres per apartment.

The project has a range of communal facilities: a health retreat with gym, a day spa, a massage and juice bar, a cinema, a rooftop horizon pool, and a rooftop restaurant and bar.

Mr Joachim also plans to develop a boutique app for P.M. residents allowing them to book spaces and concierge services along with hotels.

"This will be unlike anything seen before in Melbourne," he said.

"We took the best in international architecture, from the rooftop parties of LA to the roads of Morocco, and brought it home."

P Residences, facing Port Melbourne beach, has been given a design in keeping with its seaside aspect. The second tower, M Residences, looks towards the CBD skyline and will be styled accordingly.

The third building in the project will comprise serviced apartments. All three towers wrap around a central, elevated podium garden designed by landscape architect Jack Merlo.

"You only have to look at nearby Beacon Cove to see what urban regeneration does for demand. This process is already well under way in Port Melbourne,"Mr Joachim said.

Approval for the Third Street project comes as the state government forges ahead with its plan for the 485-hectare Fishermans Bend area.

This week it unveiled its final vision document for the urban renewal project it hopes will one day be home to 80,000 residents and 60,000 jobs.

Planning Minister Richard Wynne has already approved a number of residential towers at Fishermans Bend.

Last month, the state made a substantial investment into the precinct, buying a large $130 million swath of industrial land, controlled by GM Holden.

The government has set an ambitious target of 80 per cent of travel within Fishermans Bend to be made by public transport, walking or cycling.

It has also flagged the prospect of a new underground rail line to link the area with the city.