The council's chief executive officer Andrew Mason said the state government was working on a new plan for Victoria to guide future population growth.

But while the council supported the need for a plan, Mr Mason said it was the talk of a 70/30 split in new housing that had council concerned.

Under the government's proposed target, 70 per cent of new homes would be built in established areas, and only 30 per cent of new homes in greenfield sites.

Local governments would have to set targets to meet the strategic land supply policy which could see the city's housing become denser.

For Warrnambool, that could mean more big back yards of existing homes being carved up for units or a second property.

It could also mean more multi-storey buildings on smaller blocks would get approval to meet the proposed new guidelines.

And it also puts Warrnambool's existing heritage overlays on parts of the city's older areas at risk.

Mr Mason said the 70/30 split probably made sense in Melbourne but in Warrnambool it was "hugely problematic" where 80 to 90 per cent of existing growth was actually in greenfield areas.

"You'd really be seeing more density and probably increased building heights to achieve that," he said.

Mr Mason said Warrnambool's "beloved character" was something people wanted to protect.

"We see that every time a planning item comes up at a council meeting," Mr Mason said.

"We're not saying that we shouldn't have more density in close to the centre of the town... but we just don't think it's achievable."

Mr Mason said there was good feedback from the planning minister Sonya Kilkenny about her willingness to consider their concerns when they met with her in Melbourne last week.