Work is set to begin on a planned upgrade and extension of the Bendigo Soldiers Memorial Institute in Pall Mall within the next six months, following a $1.5 million commitment from the state government.

Planning Minister Richard Wynne made the announcement in Bendigo on Wednesday, taking the total contribution from all three levels of government to $4 million, after the federal government pitched in $1.7 million earlier this month.

The Bendigo Returned and Services League is still in the process of raising the final $200,000 needed to complete the project and a further $300,000 to fit out the new museum, but SMI redevelopment committee chairman Paul Penno said the project was “shovel ready”.

“It’s nearly there, we can feel it, it’s now an absolute goer,” he said.

“The designs are done, the approvals are in place, we had no protests against the application for extension so there really is nothing to stop this proposal going ahead.”

Mr Penno said he expected work to begin by February next year, with the refurbished facility to open its doors by November 2018.

“We always had in our head, the RSL, that Remembrance Day 2018 would be the 100-year anniversary of the end of World War I and we’ve been optimistic all through we’d be able to achieve that and now that we have this level of funding I believe we will achieve that date,” he said.

“I believe the community of Bendigo will come on board with donations, I believe Bendigo businesses will be supportive now that we’ve come this far.”

Mr Penno said the money raised by the community would go towards bringing the museum’s collection into the 21st century.

“We also want to equip the building inside with state-of-the-art ways of displaying museum information, the days of static displays are not really acceptable to young people, they actually want to be interactive with their learning and this development is all about providing an environment for students to learn in,” he said.

“We really want to engage the young people – we have already – our volunteer curator for so many years tells me we had 3000 students this year alone come through, and we imagine this redevelopment will probably treble that at least.”

Mr Wynne said the refurbishment would honour the sacrifices made by Bendigo residents in combat over the decades, while helping make the museum more accessible to younger generations.

“There is an extraordinary collection that is available here, some pieces that are not even available at the War Memorial in Canberra,” he said.

“We have to ensure that with the refurbishment of this building that we bring it up to contemporary museum standards so we can protect this important memorabilia and artifacts for the future.”