Lord Mayor Sally Capp said Heritage Victoria had approved a permit for on-site shed restoration and works will commence in stages from May.
"This is the most significant restoration of Queen Victoria Market's open-air sheds in 40 years and is a key part of preserving the heritage of the market people know and love," the Lord Mayor said.
"The market has been operating continuously for more than 140 years and during that time the open-air sheds have had their fair share of impact from weather along with general wear and tear.
"These important conservation works will be carried out across 12 sheds – covering three hectares of the seven hectare site – and will improve the heritage experience for customers and the operating environment for traders."
The heritage shed restoration is a key component of the renewal of the Queen Victoria Market precinct, and a recommendation from the 40-member People's Panel in December 2018.
The Lord Mayor said the project will be closely managed to reduce disruption to traders and customers, and ensure the market is open for business throughout.
"We'll be working closely with traders to ensure they have all the support they need to continue to run their businesses throughout the restoration, including signage and individual business mentoring through our $8 million Trader Connect program," the Lord Mayor said.
Chair of the Arts, Culture and Heritage portfolio Councillor Rohan Leppert said all sheds will be repaired and restored.
"The open-air sheds are an important part of the market experience, with many of the sheds dating back to 1878 when the market had its grand opening," Cr Leppert said.
"These works are vitally important to ensure the sheds do not deteriorate beyond repair, and will preserve them with as minimal impact as possible.
"We want to retain the characteristics that reflect the historical use of the market, such as dints and grooves on posts that that date back to when customers and traders hitched their horses to the posts 100 years ago."
Conservation will include painting and restoring timber posts, beams, structural steel, gable ends and verandas. Structural upgrades will include installing bracing components to areas that require reinforcing, which will improve structural stability, safety and prevent future damage.
A process to appoint an experienced contractor to carry out this major conservation project is underway.
Due to the scale and complexity of the heritage restoration, traders will need to be temporarily relocated, with works to be undertaken in stages over a number of years.
The permit approval for the major works follows an initial restoration trial that is nearing completion at the Peel Street ends of sheds A and C.
The open-air sheds are culturally and historically significant and are listed on both the National Heritage List and Victorian Heritage Register.