WATER Minister Peter Walsh visited Carisbrook on Thursday morning to announced $553,000 funding for the first stage of the town's flood management plan.
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The project has been jointly funded by the state government, federal government and Central Goldfields Shire.
Stage one of the plan involves designing the most effective flood mitigation works and thinning vegetation in McCallums Creek and Deep Creek.
The move comes in the wake of devastating flooding in January 2011 and is designed to protect the town from future flood events.
Central Goldfields Shire Council mayor Barry Rinaldi said heavy rain now made Carisbrook residents nervous.
"Our memories are that back in January 2011, where we're standing now, in the middle of town, our stomachs would have been surrounded by water," he said.
"It wasn't a speeding flood, it just crept into the town.
"The possibility of it happening again is probably remote but we're now moving to a stage where we'll clean out the creek, getting rid of all of the logs that have accumulated.
"The vegetation that's fallen into the creek will also be removed so that there will be a clear run of water coming through."
Mr Walsh was joined on his visit by Federal Member for Wannon Dan Tehan.
"In 2011 the Victorian Coalition government co-funded a flood management plan for Carisbrook which identified a range of potential flood mitigation solutions," Mr Walsh said.
"Thanks to this latest funding, work will start on selecting and designing options to reduce the impact of floods on Carisbrook."
The state government will provide $266,385 for the project through FloodZoom, part of a $4.2 million investment in flood related projects in 2014.
The federal government will contribute $146,615 through the Natural Disaster Resilience Grants Scheme.
Cr Rinaldi said the Central Goldfields Shire Council will contribute $140,000 to the project.