It was transformed into a densely populated district of high rise apartment and office buildings beginning in the early 1990s, as part of an urban renewal program.

Today, Southbank is dominated by high-rise development and is now the most densely populated areas of Melbourne, with a large cluster of apartment towers.

Before European settlement, the area now called South Melbourne was a series of low lying swamps inhabited by Aboriginal tribes.

By this time the riverside west of Queensbridge was lined with wharves and shipping sheds and maritime businesses including the Duke & Orr drydock, now housing the Polly Woodside maritime museum (this small area including the Exhibition Centre was separated off as its own suburb South Wharf in 2008).

A wide range of industries and warehousing occupied much of the area, mainly low scale shed-like light industrial buildings, but also heavy engineering works such as Austral Otis elevators on Kings Way (formerly Hannah Street), multi level store houses such as the Tea House on Clarendon Street, as well as the Castlemaine Brewery.

By 1900 what is now the Victorian Arts Centre had become an entertainment precinct, with the Green Mill dance hall and circus site, and a large cinema and the Glacarium ice skating rink along City Road.

Planning toward this goal began under Planning Minister Evan Walker, and the first projects were the construction of a footbridge, the first such project in the city, now known as the Evan Walker Footbridge, designed by Cocks Carmichael Whitford, and the Southbank Promenade, designed by Denton Corker Marshall, opening in 1990.

The Southgate development, which includes a shopping precinct, the Sheraton Towers hotel and new office buildings for the Herald & Weekly Times and IBM were built soon after in stages between 1990 and 1993, and combined with a new Sunday arts and crafts market, attracted tourists to the area.

In 1987 the Port Melbourne railway line was closed and converted to light rail, running up Clarendon Street and into the city, freeing up the land of the raised viaduct, and with the State Government combining surrounding land which it already owed, allowed the development along the Yarra River westward, with the Melbourne Convention & Exhibition Centre in 1996 and Crown Casino in 1997.

A plaza linked to the north bank and Flinders Street railway station via a pedestrian and cycle path developed on the Sandridge Bridge.

Having been disused since the closure of the railway line in 1987, it was spared from demolition and was opened to the public on 12 March 2006, just in time for the 2006 Commonwealth Games.

JB Hi-Fi relocated its corporate headquarters from Chadstone Shopping Centre to Southgate in 2020, after its acquisition of The Good Guys.

In May 2008 the Victorian Government created the new suburb place and name South Wharf, in the western end of Southbank (now encompassing the Melbourne Convention & Exhibition Centre and the Polly Woodside National Trust museum).

Some individual heritage buildings in the wider Southbank precinct include the 1888 Jones Bond Store (25-43 Southbank Boulevard), the 1888 Tea House on Clarendon Street, the 1885 JH Boyd High School on City Road (now a community centre), and the former Castlemaine Brewery on Queensbridge Street.

Southbank has a network of major roads running through it and is often heavily congested with traffic and limited mainly to off-street multi-storey parking.