The Victorian government has fast-tracked a $27 million development proposal in Doncaster, which will create hundreds of jobs.

The proposed residential development, if approved, will provide 85 residential apartments and create 200 construction jobs, according to acting Planning minister, Peter Batchelor.

"Recent population forecasts indicate that to cater for our growth over coming years 316,000 new dwellings will need to be located in Melbourne's established areas," Batchelor said. "We need more homes to accommodate our growing population, so we must plan now to manage growth and preserve liveability."

The focus will be on locating more intense housing developments in and around activity centres, along tram and bus routes, in areas close to train stations and on large redevelopment sites, he said.

The proposal is consistent with the Manningham Planning Scheme which seeks to develop the Doncaster Hill Principal Activity Centre as a focus for contemporary high density residential development.