Victoria has rejected a recommendation to raise the population target for Fishermans Bend and will now limit residents in the country's biggest urban regeneration project to 80,000 in an effort to make the 480-hectare site liveable and sustainable.

Planning Minister Richard Wynne, who rejected a planning panel recommendation for a 120,000 population for the area on the southern edge of Melbourne's CBD, will on Friday outline new rules to replace the controversial overnight 2012 rezoning by his Liberal predecessor Matthew Guy, limit high-density developments to certain precincts and make for predominantly mid-rise urban neighbourhoods.