Plans for a hotel at Tasmania's MONA museum have been shelved for the time being.

The quirky owner of Tasmania’s Museum of Old and New Art (MONA), David Walsh, has shelved plans to develop an AUD$400 million hotel on-site at the popular attraction.

Since it was first announced in 2013, the hotel project has gradually been revised in its size, dropping from an originally mooted 172 rooms down to 90 rooms, with design ambitions for the hotel resembling a shopping trolley as a suspension bridge build on the edge of the Derwent River.

The hotel was intended to feature a casino, theatre, day spa, outdoor concert stage, multiple dining and recreation outlets, conference facilities and interactive art and experience rooms, with design expertise provided by Nonda Katsalidis. The hotel would have been accessible via specially designed ferries operating from Hobart.

MONA said Walsh is also now working on plans for an underground tunnel linking the museum’s main building to the ferry terminal along with an extension to the jetty.