The stage one works, worth $420,000, will deliver more than 20 new hangar spaces complete with linking taxi ways. 

Mr Rich-Phillips said the facilities were invaluable to Bendigo. 

"Expanding Bendigo Airport is critical for economic development and emergency service use," he said. 

City of Greater Bendigo Mayor Barry Lyons said the works at the airport, which serviced a catchment of 200,000 people, were long overdue. 

"We haven't had serious money committed to this site since the 1970s so it's crucial to commit to this project," he said. 

“Bendigo Airport has experienced a substantial increase in aircraft movements in recent years with over 29,000 landings and take-offs per annum."

The $420,000 stage one works have been funded by a $300,000 grant from the state government and a $120,000 contribution from the City of Greater Bendigo.

Works are expected to be completed in early 2014, with a number of hanger leases already signed. 

Stage two of the project will include the construction of a new $15 million 1600-metre long by 30-metre wide runway pending a $5 million funding commitment from the federal government. 

City futures director Stan Liacos said the council was committed to securing funds. 

"We won't give up. We will campaign all the way," he said. 

"We might even run some sausage sizzles to get some more funding for this vital project."

Cr Lyons seconded the statement.

"It’s imperative for a growing region like ours to grasp this opportunity with both hands and work in partnership with all levels of government to build an airport to serve our region well into the future," he said. 

emma.schenk@fairfaxmedia.com.au