Damasa has submitted a revised plan to Wagga City Council for the second stage of its Civitas project in the Wagga CBD, which is set to lose two storeys of car parking, reducing the total spaces from 483 down to 316.

Plans for the development originally consisted of a six-storey car park alongside a six-storey commercial component on the corner of Docker and Morgan streets.

The changes will now see the car parking space revised down to four storeys, while the commercial component will be reduced to five storeys. The entire fifth floor will be devoted to office space.

The modification will instead see an increase in the leaseable floor space from 6730 square metres to 6860 square metres.

Director Manuel Donebus said the property development firm was forced to downsize stage 2 due to a 30 per cent increase in building costs since Wagga councillors approved the project two years ago.

"The project became unfeasible due to the significant increase in building costs over the last couple of years," Mr Donebus said.

The developer said the firm had been "working really hard" in an effort to reduce those costs, but they weren't able to keep the project viable without the current modifications.

"We've removed two levels of car parking and lowered the overall height of the building slightly," he said.

The project has drawn criticism from local residents over the height of the proposed building next to residential properties.

Criticism about the broader Civitas project has also included concerns about the expected increase in traffic in the area.

Mr Donebus said despite the reduction of a significant number of car parking spaces, the project would still include more than enough.

"The plans will still have more than double the amount of car parking that we need," he said.

Mr Donebus said the project was now in the council's hands, but hoped to begin construction in the coming months if everything runs smoothly.

Meanwhile, Stage 3 of the project, which was lodged earlier this year, is also currently awaiting council approval.

The $43 million proposed mixed-use residential and commercial complex, set to house 98 residential premises at 185 Morgan Street and 66-74 Murray Street, promises to be a major boon for the ongoing housing crisis.

"That hasn't gone up ... on public exhibition yet, but we are working on that project in the background as well," Mr Donebus said.