The club's plan to move its Grandstand gaming venue within 500 metres of a housing commission complex met fierce opposition from residents, The Flemington Association, Maribyrnong council and Melbourne Greens MP Adam Bandt.

The application to the Victorian Commission for Gaming Regulation has been withdrawn.

A statement from VRC chief executive Dale Monteith revealed the club would now seek to rezone the Epsom Road land for residential-mixed use.

Mr Monteith made no mention of community opposition being a factor behind the decision.

"While the entertainment centre will not go ahead in this location, the VRC will continue to evaluate a number of options for the club's gaming business," he said.

"The VRC's decision to reconsider development of the entertainment centre on the Epsom Road site is based on economic grounds, given industry uncertainty and the potential cost of the project."

The land in question is owned by the VRC.

Flemington resident and executive member of The Flemington Association Jennie Gallivan said residents were taking the decision as "very good news".

"It will help keep the problems of the disadvantaged being exploited by pokies away from the area.

"Our impression is that they were taking on board the concerns and criticisms people had."