The prospect of a development boom around the Queen Victoria Market has prompted a flurry of property sales among adjoining landowners.

A prominent corner building at 422-428 Queen Street leased to the popular Muleta's Cafe has sold to an interstate investor for $5.5 million.

The two-storey building with an office above on the corner of Franklin Street is directly opposite the market's car park and a few doors down from the soon-to-be-developed Melbourne Council-owned Munro site.

The Queen Street sale has prompted two other potential development sites next door, at 132-140 Franklin Street and 142-146 Franklin Street, to be offered to the market.

Combined, those blocks form a 700-square-metre site.  

They have been held by the founder of BJS Insurance brokers Ronald Smith since 1984.

Preliminary work on the new-look Queen Victoria Market will begin this month after being given the nod by Premier Daniel Andrews in July.

The state government cleared planning hurdles for a $400 million redevelopment of the Munro building, but it placed a 40-storey height limit on the area which has forced Melbourne Council back to the drawing board to cut down its 60-level proposal.

That won't stop shovels starting to turn dirt later this month on a greenhouse-style glass market pavilion on Queen Street, to be built for market traders disrupted when work on the main market's $250 million redevelopment starts in March.

Fitzroys' Rob Harrington and Louis Christou of Christou & Co negotiated the Queen Street sale, where the price reflects a building rate of around $10,000 per square metre.

The market precinct was "probably one of the strongest growth areas in the CBD  at the moment", Mr Harrington said.

The buyer of the cafe site had no plans as yet to develop the land. "It's more of an opportunistic buy. They might do something with it ultimately," he said.

The Franklin Street sites, to be sold via expression of interest through Colliers International's Oliver Hay, Daniel Wolman and David Sia, are expected to fetch about $12 million.

"The 700-square-metre site has already generated significant inquiry as a multitude of buyers compete for the limited supply of freehold properties in this tightly held pocket," Mr Hay said.

The final plans for the market's redevelopment will need approval from Planning Minister Richard Wynne and Heritage Victoria.