Baptist Care Australia has won a four-year legal battle to build a new retirement village on the site of its former residential care facility in Canberra.

Last week the ACT Tribunal gave approval for the provider to develop 100 independent living units on the 22,600 square metre block, in the inner south suburb of Red Hill.

The original application, which included 114 units, was lodged with ACT Planning in 2010.

It was rejected twice before going to the Tribunal, the ACT Supreme Court and then the Court of Appeal, due to concerns the scale and density of the proposal did not meet zoning regulations.

Opposition from a local residents group centred around the coverage of the building on the block, increased street traffic and lack of consultation.

During the course of the proceedings, Baptist Care revised its original plans to meet the new Territory Plan that was released, foregoing a third floor attic living space, reducing the number of units, increasing the height of fences and addressing safety concerns about the driveway.

An underground carpark with 136 spaces is included in the plans.

The original building, which comprised 105 residential care beds and 18 independent living units, has stood vacant since being decommissioned in July 2015.

In a statement about the development, Baptist Care said research has shown the ACT faces a looming shortfall of housing suitable for its ageing population and the Red Hill development will help to alleviate pressure on the growing demand for housing.

It is now considering the timing and next steps in this development.