$200m plan for derelict city site

A DERELICT city site will undergo a $200 million redevelopment featuring apartments, shops and an upmarket laneway.

On the corner of William and Lt Bourke streets, the site includes a Telecom building that has been vacant for 20 years.

Planning Minister Matthew Guy said a permit had been granted for hundreds of apartments, offices, ground-floor retail outlets and parking.

"The development is expected to attract the legal fraternity, given the site's close proximity to the law courts and barristers chambers," he said. "Of particular note is popular Guests Lane, which links Bourke and Lonsdale streets.

"(It) will be upgraded at the cost of the developer to enhance pedestrian amenity and ... great laneway lifestyle."

The developer is Hengyi Australia, a subsidiary of a Chinese firm.

It was reported earlier this year Hengyi bought the Communications House site for $45 million.

The existing building was finished in 1966.

It housed the Postmaster-General's department, forerunner of Australia Post, and Telecom Australia.

Telecom was later privatised and renamed Telstra.