Pankaj and Radhika Oswal are owners of Perth based domed structure that included a temple, a gym, an observatory with a revolving roof and parking for 17 cars.
The controversial property was being built by Oswals who fled the country in 2011 when their Burrup Fertilisers empire collapsed a year earlier.
Oswals left Australia owing millions of dollars in taxes, AAP news agency reported.
The couple purchased multiple blocks in a posh suburb of Perth in early 2000s to contruct their property.
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Work for the mansion ended in 2010 when the couple experienced business problems and left for Dubai.
It was estimated they had spend close to 40 million dollars on the unfinished home.
"An application filed by Oswal with State Administrative Tribunal to prevent the demolition was now being withdrawn, in time to cancel a full hearing that was scheduled for November 9," Peppermint Grove shire president Rachel Thomas said.
Preparation works must begin by December 31 and the site must be cleared by September 30, 2016, all at the Oswals' expense, Thomas said.
Thomas said police were regularly called to the unfinished property after it was left to fall into disrepair.
"We were aware that it was a real nuisance for the immediate neighbours in particular because of the antisocial behaviour. And with the graffiti, it was a real blot on the landscape," she said.
"It really impacted on the amenity of the area. We've had people smoking dope in there, police called out on a number of occasions because of noisy parties, people climbing over the wall - it's been a real problem.