Martin Strode, the developer behind the 17-level former Yorkshire Brewery apartment complex, will raze Fitzroy's historic Lyric Theatre after getting approval from planning authorities.
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Mr Strode's company SMA Projects submitted plans for a 10-storey building on the site at 239-249 Johnston Street. The plans include a ground-floor supermarket and liquor outlet, and 158 apartments above.
The buildings on corner of Gore Street were occupied by Jimmy Possum furniture and include the MacRobertson Garage site, parts of which will be retained in the new development.
Yarra Council rejected SMA's plans on the grounds the apartment's height was excessive and would have an impact on other nearby heritage buildings. It also opposed having another liquor outlet in Fitzroy.
The Victorian Civil and Administrative Tribunal approved the project this month.
Mr Strode said construction of the $115 million complex would start towards the end of the year and building would be finished in mid-2017.
No tenant had been finalised for the 1800-square-metre retail component, although it was expected to suit a supermarket operator, he said.
The art nouveau-style silent picture Lyric theatre - hidden from Johnston Street behind a rendered blue wall - screened films between 1922 and 1952.
An expert's report found the facade of the theatre has been altered so many times that there was little of historic value left.
