The short home straight will be extended from 173m to 317m and widened to 30m.
It will be on the "school side" of the course, where the new stand will be built. The plans include moving the horse stalls area to the centre of the course, while the infield will include sporting fields for community use.
Racing club chairman Don Casboult said the initiation of Moonee Valley's redevelopment was a history-making moment.
"It will deliver a huge range of benefits for the entire community over the next century," he said.
"The scale and ambition of this project is unparalleled.
"The Valley of Tomorrow will respect our great heritage while creating a wonderful new environment for all to enjoy."
The project will move into a detailed design and construction phase, with marketing of the first residential precinct scheduled to begin in mid-2018.
The new track
• 1702m in circumference, with the home straight extended from 173m to 317m.
• 30m wide, providing capacity to stage up to 35 race meetings each year.
• All key starting positions will be retained, including the Cox Plate 2040m start at the top of the home straight.
• Enabling an increased number of starters.
The new grandstand
• Aims to deliver the world's best night racing venue.
• Positioned to capitalise on the city skyline and night lights.
• Cost of new track and grandstand to be about $200 million.
