Mick Tsikas / Reuters Pedestrians walk past street art in Hosier Lane, that contained a street art stencil by British graffiti artist Bansky in central Melbourne.
Melbourne's city council said the cleaners were simply carrying out orders to remove graffiti from unauthorised sites when they destroyed the stencil of a parachuting rat.
"It is very unfortunate that this Banksy artwork has now been removed," said council chief Kathy Alexander.
"We will now be acting to implement retrospective legal street art permits to ensure other famous or significant street artworks within the city are protected."
Reports said the piece was one of several created during a 2003 visit by Banksy, whose distinctive style and provocative slogans have made him one of the world's best-known graffiti artists.
"As the street art capital of Australia, we are aware of the popularity of Banksy's works and have made exceptions to preserve them in the past," Alexander said.
"In hindsight, we should have acted sooner to formally approve and protect all known Banksy works."
Works by Banksy, whose true identity remains unknown, have surfaced in the West Bank and post-Hurricane Katrina New Orleans and sell for tens of thousands of dollars at auction.
But three years ago, workmen in London painted over a Banksy piece valued at about 450,000 dollars, depicting John Travolta and Samuel L. Jackson's characters from the film Pulp Fiction holding bananas instead of guns.