The Olinda public golf course closed more than five years ago after being abandoned by its owners. It has since been maintained by Parks Victoria as a bushfire break in the Dandenong Ranges.

Wedged between the National Rhododendron Gardens and the Dandenong Ranges National Park, the former course will be converted to parkland in mid-2018.

The Andrews government will spend $4.72 million converting the 34-hectare zone to parkland, which will include open space, picnic areas and a sports oval.

The rhododendron gardens will also be expanded and rebadged the Dandenong Ranges Botanic Gardens.

The gardens feature a collection of more than 50,000 rare and exotic plants, some of which are endangered.

Designs for the park are expected to be released early next year.

Deputy Premier James Merlino, also the local member, said the community had called for the site to be turned into a recreation space.

"I look forward to bringing my own family here to kick the footy, enjoy a picnic and make the most of this beautiful setting," he said.

Lily D'Ambrosio, the Environment Minister, said the golf course would be transformed into a beautiful place.

"This park is destined to become the heart of this local community, where people can enjoy the outdoors and bask in the natural environment," she said.

There is a pattern of decline among public golf courses in Melbourne.

The city's cashed-up private courses are thriving, but about half of the state's golf courses are in financial difficulty.

Many are merging, relocating or being sold to developers, a recent government discussion paper Planning for Golf in Victoria found.

A strategic report on planning for the future of Victoria's golf courses, including responding to pressure from developers to sell up and rezone for housing, is due for release later this year.