The University of Melbourne has paused plans for its Fishermans Bend campus, delivering a setback to the troubled urban renewal project in Melbourne’s inner south.

The university will halt development on the seven-hectare site it purchased for $49 million in 2018, citing a “constrained revenue environment driven by evolving regulations across the sector.”

According to The Age, the $2 billion campus, designed for advanced manufacturing, design, and engineering, had only seen preliminary site clearing completed.

Vice-President Katerina Kapobassis said the decision, while difficult, is a strategic pause.

“After carefully reviewing the prioritisation of our major infrastructure projects, the University of Melbourne has made the difficult decision to pause work on the Fishermans Bend Campus,” she said in a statement sent to Neos Kosmos.

“The University remains committed to the precinct and this decision will allow us to better align with the timing of key government and industry investments necessary to develop the Fishermans Bend precinct.

“Careful financial management is paramount as the University adapts to a more constrained revenue environment… The Fishermans Bend project will be reassessed as part of the development of the University’s next 10-year strategy from 2030.”

The campus was originally expected to host thousands of students by 2024 and 10,000 staff and students by 2031.

It was intended to complement nearby advanced manufacturing companies, including Boeing and General Motors Holden.

In a statement sent to Neos Kosmos, Melbourne Lord Mayor Nick Reece said he was disappointed but understood the reasoning behind the decision.

“I’m very disappointed to see works pause on the University of Melbourne’s Fishermans Bend campus, but I understand why the university was forced to make this difficult decision,” he said.

“It makes sense for the university to wait until key state transport infrastructure projects are underway – so students, residents and workers can easily get to the precinct and the campus.

“It also makes sense for the university to wait until it has more certainty around international student caps before making a massive investment like this one.”

The Fishermans Bend project, launched in 2013, aims to transform the former industrial area into a community for 80,000 workers and 80,000 residents by 2050.

Delays, transport challenges, and regulatory uncertainties have contributed to a slower-than-expected rollout, with major projects now facing multi-year postponements.