As people have said, it varies from place to place but in my part of the world (Sydney), the practice was often just to close the cemetery and build another one.
[Central station was built over the city’s first major cemetery](https://en.wikipedia.org/wiki/Central_railway_station,_Sydney). When they closed the cemetery they gave families of the deceased two months if they wanted to exhume and rebury remains. Any uncollected corpses were built over. A new necropolis was built and named Rookwood to accommodate new deaths.
Near where I live [the local churchyard cemetery was mostly rededicated as a public park](https://en.wikipedia.org/wiki/Camperdown_Cemetery). The church built some new walls around a smaller yard and moved the headstones inside that but not the corpses.
In both cases subsequent works have scared hell out of people [when they start digging up skeletons](https://www.news.com.au/national/nsw-act/news/human-bones-to-delay-sydneys-light-rail/news-story/4732e12eb512b2aa8dd6f5f52f1829fc).
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