Lord Mayor Sally Capp said the City of Melbourne has consulted with four other land managers and the wider community in developing the master plan for the 123-hectare parklands.
"The Domain Parklands are a treasured part of Melbourne. We all know how important it is for our mental and physical health to get outside and enjoy nature and as Melbourne grows, these green spaces will become increasingly important to our city's liveability," the Lord Mayor said.
"Since the previous master plan was developed in 1997, the parkland has experienced a significant increase in visitors. We need to provide more services for these visitors and manage the impacts of climate change, extreme heat and water restrictions."
The master plan will be considered by the Future Melbourne Committee on Tuesday 19 February 2019.
The Domain Parklands are more than 150 years old and include the Royal Botanic Gardens, Shrine of Remembrance, Sidney Myer Music Bowl, Government House, Alexandra Park, Alexandra Gardens, the Queen Victoria Gardens and the Kings Domain.
They are also the Traditional Country of the Boon Wurrung and Woiwurrung (Wurundjeri) people of the Kulin Nation and a significant meeting place for more than 40,000 years.
Chair of the Environment portfolio Councillor Cathy Oke said the master plan seeks to recognise these individual and unique destinations, while also strengthening the parklands as one Domain.
"The Domain Parklands are the lungs of our city, our answer to New York's Central Park or London's Hyde Park. Many people will fondly recall attending concerts in the Domain, picnicking by the Yarra or running around the Tan as a daily ritual," Cr Oke said.
Cr Oke said the master plan proposes to further expand the city arboretum to trial climate-resilient tree species in partnership with the Royal Botanic Gardens Victoria.
"Ferdinand Mueller, the first director of the Royal Botanic Gardens planted an arboretum through the parklands in the 1850s and 1860s to trial tree species for a developing Melbourne," said Cr Oke.
"Our aging urban forest within Domain Parklands faces new climate and population growth challenges. As trees reach their end of life, we can make strategic decisions about suitable replacement species that will thrive into the future.
"An expanded city arboretum would allow experts, students, and the general public to learn about plants and their natural history. It would be used to identify and trial trees which are better at coping with future climate conditions.
"The lessons from the arboretum would be applied to tree selection and management across the municipality.
"It's very early days but a new treetop walk, north of the Sidney Myer Music Bowl, could also be investigated as part of works to make our urban forest accessible to everyone," Cr Oke said.
The master plan highlights key areas for improvement including improved signage and bicycle connections, and upgrading the picnic and barbeque area next to the Yarra River.
"Working with Traditional Custodians to better acknowledge the significant Aboriginal cultural heritage of the parklands is also of upmost importance to us," Cr Oke said.
The plan also proposes some changes to roads and parking to reduce through traffic and improve amenity and safety for pedestrians and cyclists. These are long-term plans and no road closures will take place before Anzac Station, at the doorstep of the parklands, is opened as part of the Metro Tunnel Project.