The resort is to be built on land with a rural zoning on the Daylesford-Trentham Rd.

The plan was backed by councillors Max O'Shea and Warren Maloney, which followed with the planning officers' recommendation. There were eight objections.

The resort will operate as a health retreat and conference centre, including accommodation units totalling 120 rooms and a day spa by a man-made lake.

Holocombe ward councillor Max O'Shea said the application was one of the best proposals put forward to council.

Cr O'Shea said, although there was conflict of land use, Clearwater developers had agreed to work with farmers.

"They will respect the right of the farmers and live in harmony," he said.

But Coliban ward councillor Heather Mutimer said council should refuse the application and voted against the motion.

"It is a very big development and there are serious issues relating to water and sewerage abutting agriculture land owners and adjoining land," she said.

"If the developer is really fair dinkum he should be connected to water mains."

Cr Mutimer also questioned the choice of land for the development.

"I question whether this is the best choice of development for the land," she said.

"I am concerned for the farmers and we should consider their views."

Cr O'Shea said the application was proactive in caring for the environment.

"The applicant will work with us to ensure all conditions are met," he said.

Clearwater Resort will be concealed from the road by the natural lie of the land which will create a private and relaxed atmosphere.

All the apartments will have ensuites and overlook an existing man-made lake.

"This will be a great development within our community that is hidden away," Cr O'Shea said.

Council's chief executive officer Victor Szwed said the resort, expected to be operational in about two years, was one of the biggest tourism developments in recent years.