The announcement for the 13-storey, 40-metre luxury apartment blocks overlooking the Tamar River was made in May, and the planning approvals process to rezone the land from commercial and industrial to residential was underway.

But Mr Stewart said he had received 11 pages of requirements from council officers that he was "not prepared to do as a developer".

The requirements included commissioning a hydrologist or similar engineer to do a flood impact report; a site contamination assessment by a suitably qualified expert; a noise and environmental report; a height and context study; and a traffic impact assessment.

Council signalled it intended to peer review the reports, "meaning it was going to be a long hard slog and at the earliest perhaps a 2021 start if approved," Mr Stewart said in an email to councillors.

There were 31 issues raised by council's planners, but the core one, Mr Stewart said, was flood risk as the site at Invermay is on a floodplain.

"If there was a big flood, they've got to evacuate Invermay so they don't want residential developments there," he said.

However, the part of the planned towers at risk of flood was a car park, Mr Stewart said.

"The [height of the] car park was significantly above Bunnings, Officeworks, all of that - there hasn't been a flood that would reach that level anyway since 1929 that I know of, and they've put flood levees in since then, so it staggers me," he said.

"It's got nothing to do with money, it's got nothing to do with jobs, it's got to do with them not wanting residential buildings in Invermay. Which I understand, but I think the risk is very small, in my opinion."

Council planners had not rejected the application, and the final decision would lie with the Tasmanian Planning Commission.

But Mr Stewart said in his email to councillors that the "tone of the draft letter clearly convinced me that the planners would not recommend the rezoning amendment", and added afterwards that "the planners were dead against it".

City of Launceston mayor Albert van Zetten said the withdrawal was disappointing, but the project was always going to be difficult to deliver.

"New residential development is prohibited in Invermay as it is located in a flood zone - that is why a Planning Scheme Amendment was required," he said.

"Council planning officers explained [the] challenges in a fair and balanced manner. While this seems to have been taken that our staff were being negative, it most certainly was not their intent.

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"It is important that an applicant is in a position to provide the minimum standard of information to meet the requirements of the planning scheme. Unfortunately, Mr Stewart indicated that he was unwilling to meet those requirements on this occasion.

"Mr Stewart has been able to navigate the system on many occasions. However, this proposed development has proven to be a step too far."

Mr Stewart said he would decide over Christmas whether to can the project entirely, or to build the towers or one tower at another site in Launceston, or Hobart.

"I'll wake up on the first of January and consider it all," he said.

"We've put a lot of investment into the design and the structure, and there's a site I like in Hobart - there's a site I like in Launceston too.

"[The problem is that] it takes a lot of money but more importantly it takes a lot of energy to go through the whole planning process again. I'm nearly seventy. I should be taking my grandchildren fishing.

"Onwards and upwards, its not the end of the world."

The plan was for 22 luxury apartments contained within two 40-metre towers, with selling prices starting at $1.5 million.

The 13-storey towers would have been on Lindsay Street overlooking the Tamar River, close to Mr Stewart's Silo Hotel.

There also would have been an indoor swimming pool, gymnasium, a high-end grocery store, and other amenities.