Approval for the project was gazetted late last week and construction is now expected to commence on the site in the coming weeks.

The plan includes 10 detached single-storey houses, three double-storey houses and 12 apartments.

Development of the site has been on the drawing board in different forms for at least a decade, and has been the subject of a number of VCAT hearings with objectors and proponents.

The developer's planning consultant - Myers Planning & Associates managing director Steve Myers - said the approval paved the way for the first stage of "Moness to Peterborough" to commence.

Myers planning had applied directly to the Victorian Planning Minister for a Special Control Overlay for the site, and on Friday, March 22, the amendment to Moyne Shire Council's planning scheme for the property was gazetted after being approved by Planning Minister Sonya Kilkenny on March 6.

Mr Myers said it heralded a new era for Peterborough.

"This residential development, featuring 25 units and a cafe, pays homage to the heritage of the site while embracing a vision for the future," he said.

"Moness stands as a tribute to the old house that once graced this land, reflecting the developers commitment to honouring the past as they plan for tomorrow.

"This milestone marks a significant moment for Peterborough, promising much-needed housing options within the township."

Mr Myers said that at the heart of the vision for the site at Hamilton Street lies a dedication to sustainability and the environment.

"The development aims to seamlessly integrate modern living with the natural beauty of our surroundings, creating a community that thrives in harmony with Peterborough's coastal beauty," he said

"As construction gears up in the coming months, we eagerly anticipate unveiling the sales board, symbolising the beginning of an exciting new chapter for Peterborough."