Australia's tallest tower will be built in Melbourne after the construction project was given the go-ahead for development.

The $2billion Southbank by Beulah - nicknamed the 'Green Spine' - building in Melbourne will have two twisting towers - with the tallest to hit 365m and the other reaching 253m.

There will be private residences, commercial offices, a five-star urban resort, conference and entertainment centre, and green spaces among the 270,000sq m mixed-use precinct.

The Victorian government announced on Friday that it had approved the project on City Road, which is one of four projects worth more than $3.5billion in total being developed in the same area.

Dutch architecture firm UNStudio and Melbourne-based Cox Architecture designed the building.

It will also include a separate 56-storey twisting tower and will dwarf the nearby Australia 108, which stands about 319 metres, and Queensland's Q1 which is about 322m. 

'The ambition of the project is twofold – a building that is a city in itself, with its multitude of programs and connectivities,' Cox Architecture said.  

'As well as being fully integrated in the existing city network of cultural, entertainment, leisure and commercial offerings.'

The project is being led by Melbourne developer Beulah and is expected to create more than 4700 construction jobs.

Construction is expected to start in 2021 and take five years to finish.

The 'Green Spine' is part of the Building Victoria's Recovery Taskforce set up by Minister for Planning Richard Wynne which will ensure building projects will continue development during the coronavirus pandemic. 

'This taskforce will help ensure the building and development industry is a driving force for Victoria's economy through this pandemic and beyond,' Minister Wynne said.

'It will help deliver existing projects more efficiently and assist new projects to get off the ground faster.'

He has also approved building projects for a 35-level office building at 555 Collins St, a 26-storey tower office at 52-60 Collins St and a 300-apartment building at 550 Epsom Road Flemington.

Minister Wynne and Treasurer Tim Pallas will oversee the project, which will investigate planning and investment opportunities to boost Victoria's building and development industry over the short, medium and long term.