Billionaire Clive Palmer has axed plans, at the 11th hour, to build a huge vintage car museum on the Sunshine Coast after the development attracted strong community opposition. 

Mr Palmer withdrew his development application for a 32,000-square-metre building just hours before Sunshine Coast councillors were due to vote on the proposal.

Council officers had recommended the development at Yaroomba should be rejected for 11 reasons, including because it exceeded the town planning scheme's height limit and conflicted with the visual amenity of the area. 

The proposal triggered a strong response from the seaside community, with only seven out of 723 public submissions in favour of the project. 

The four-storey vintage car museum was part of Mr Palmer's plans to transform his Palmer Coolum Resort, which was mothballed in 2015. 

The proposal on the 150-hectare site was mooted to have 879 car bays and 363 motorcycle bays to display old vehicles. 

The Sunshine Coast mayor and councillors were due to vote on the project at a highly anticipated meeting on Thursday. 

But on Wednesday afternoon, a town planner for Mr Palmer's company Coeur De Lion Investments notified the council that it was withdrawing the development application. 

Mr Palmer has been contacted for comment. 

Mayor Rosanna Natoli said she could not "really speculate" on why Mr Palmer withdrew the application. 

"It's in the hands now of that particular property owner," she said. 

Lynette Saxton from Development Watch led a long community campaign against the car museum. 

"We're overjoyed," she said. 

"Clive's reasons for withdrawing are not known to us, but I can only presume it's because council recommended refusal.

Ms Saxton said she hoped Mr Palmer had "found a better place to display his vintage cars". 

She said she agreed with the council planners' assessment of the project that it was "much larger" and "much higher" than what was allowed under the planning scheme. 

"[Developers] have to remember that it's the community that has to live with these changes," she said. 

Mr Palmer purchased the former Hyatt Regency resort in 2011 before rebranding and then closing it four years later. 

The Palmer Motorama Vintage Car Museum opened in 2013 with about 100 cars.

Mr Palmer announced a $100 million renovation in 2021 with plans to reopen it in late 2022.

The resort made headlines last year when construction workers were locked out over a workplace dispute. 

In February, the Fair Work Commission awarded three former employees compensation after determining they were unlawfully dismissed. 

At the time, a spokesman for Mr Palmer told the ABC that the revamp was due to finish this year.

Mr Palmer's town planner is seeking a 10 per cent refund of its development application fee, as it is entitled to under the council's fees schedule.