Three inner city Sydney suburbs will be given extra heritage protection and 53 new heritage items under the City of Sydney's draft Sydney Local Environmental Plan (LEP).

City of Sydney Councillors will consider sending the LEP to the Department of Planning September 13, seeking formal approval to publicly exhibit the draft controls before the end of the year.

Under the new LEP, Millers Point will be declared a Heritage Conservation Area and the suburbs of Glebe and Forest Lodge will be protected by seven distinct Heritage Conservation Areas, recognising the specific heritage character of each area.

Heritage conservation areas preserve and acknowledge the heritage significance of a particular area, whether it be a village or a group of buildings or streetscape.

Home owners are still permitted to undertake extensions and modifications, but generally the facade or the renovation needs to be sympathetic to the streetscape.

City of Sydney CEO, Monica Barone, says the plan strikes a careful balance between encouraging sustainable and responsible development and protecting Sydney's heritage and unique character.

"The new LEP will provide for high quality sustainable development which is central to the vitality, liveability and culture of our city," Barone says.

"The LEP dovetails with the City's Sustainable Sydney 2030 plan to provide for responsible development in the renewal areas to the south of the city and greatly improve the social, economic and environmental performance of the Sydney region."

The Australian Youth Hotel at 63 Bay Street, Glebe, is proposed to be heritage listed to reflect its historical significance as a rare surviving hotel from the earliest phase of Glebe's development. Also proposed for listing is the former home of Juanita Nielsen, a terrace house at 202 Victoria Street, Potts Point.

The City will undertake a program of public exhibition and consultation. Submissions from residents, community groups, property professionals and all interested groups and individuals will be invited during the public exhibition period.

Following consultation, the final LEP is expected to be reported to Council and the Minister for Planning for adoption in 2011.