A new 29-storey downtown office tower that will incorporate parts of the Kelly Ramsey building moved closer to realization on Tuesday after council's executive committee approved a plan that will give the owner funding for restoration work.

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This architect's rendering shows the completed, proposed project. Ciy of Edmonton (City of Edmonton )

Councillors approved a plan to designate the fire-ravaged building a Municipal Historic Resource, which could make the project eligible for as much as $1.8 million over three years from the Heritage Reserve Fund, which must be matched.

Developer John Day plans to demolish most of the building that was mostly destroyed by arson in March 2009.

The east and south facades will be dismantled and restored with the guidance of high resolution photographs.

The former Swedish Jewellers building and the so-called green "Sony" building will also be demolished to make way for the project.

The building is estimated to cost $250 million, with $3.5 million going towards the Kelly-Ramsey restoration.

Council is scheduled to make a final decision on the historical designation next week.