Flammable building cladding that contributed to a serious fire at a Melbourne apartment block must be replaced, the Building Appeals Board says.

A stray cigarette on a balcony started the blaze at the Lacrosse building in Docklands in November 2014.

Flames raced up the building’s exterior, fuelled by cladding imported from China that was not tested to Australian standards.

The board has dismissed an appeal by owners and the builder that would have allowed the cladding to remain, with the installation of additional water sprinklers.

It says fire risks posed by storage of material on balconies, the uncertainty of sprinkler operation in some weather conditions and the combustible nature of the cladding does not satisfy the required codes and standards.

The board will now decide how long owners have to comply with building orders, issued by the City of Melbourne’s Municipal Building Surveyor, to remove the cladding.