It was passed in on a vendor bid of $800,000, lower than the $1 million real estate agents were tipping.

However, co-agent Arch Staver from Nelson Alexander said he was optimistic the property would sell this week.

“It was a good day, we wanted to sell, however it was passed in for less than we hoped for,” Mr Staver said.

“There was a strong crowd - in fact, I think the whole town turned up, it was just unfortunate it didn’t sell on the day."

The prominent hotel, well-known in recent years as a popular bar and foodie destination, is on the Kyneton to Heathcote Road, midway between the two towns.

The freehold was offered complete as a going concern with agents Peter Moore, Hotel & Leisure Broker of the Melbourne Commercial Group, and Mr Staver expecting the property to reach the $1 million mark.

The distinctive 250-square metre single-storey bluestone hotel building is set on more than 9100 square metres of professionally landscaped grounds within one of Victoria’s more popular wine regions. 

It features a commercial kitchen complete with fixtures and fittings, a two-bedroom bed and breakfast unit called The Mews, which was used as onsite accommodation by the owners, and several other outbuildings. 

There is also a transferable liquor licence.

Mr Moore said the owners remained “in a selling mood” and were open to offers.

“We had about 100 people attend the auction, with a lot of people from out of town," he said.  

"It remains a great property with more than 4000 cars going past each week.

"We remain optimistic that the right buyer will come along and reopen the hotel once again for business.”

Several other landmark buildings in central Victoria are also on the market.