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The spread of suburban housing into North Carlton in the 1880’s meant that by the turn of the century the cemetery site was surrounded on three sides by dense inner city housing. It became obvious that further expansion of the cemetery was highly unlikely.
With the increased usage of the cemetery and available land becoming scarce, wide-spread pressure came from both public and political arenas for the cemetery to be closed. With virtually no financial reserves available to maintain the site and the number of new graves diminishing, the future of Melbourne General Cemetery was in doubt.
In 1904, the cemetery was closed to all burials except those of families who had purchased plots in advance. The following years saw continuing financial pressures which were compounded by the lack of revenue. Expenditure was exceeding income on a yearly basis and it was acknowledged that this would only be reversed if the cemetery was re-opened for the sale of new grave sites.
In June 1927, the Trust approached the Minister of Health seeking permission to sell 3,000 grave sites that were unsold when the cemetery closed in 1904. Permission was subsequently obtained and by November 1927, Melbourne General Cemetery was again a busy operation.
In 1933 the closure order was varied again by a special Act of Parliament which allowed 2.4 hectares (6 acres) of the entrance reserve to be used for burials. As a consequence the Ministers’ Waiting Room and original administration buildings were taken down stone by stone and the main cemetery entrance was moved to its current position on College Crescent. The bluestone from the original two structures was used to build what is now referred to as the Gatehouse. The gothic style administration building was designed by architect John Gawler. | 
