The Goldfields Library Corporation says it would welcome a possible relocation of the Kangaroo Flat Library to another site on Lockwood Road.
The City of Greater Bendigo will assess different locations for the community facility after landlord Charter Hall indicated it wanted the site on High Street back.
Charter Hall owns Lansell Square, where the library is based.
A centre management spokesperson said no firm decision had been made on the future of the site.
Goldfields Library Corporation services the Kangaroo Flat Library.
Corporation chief executive Mark Hands said a new building would need to be near other services with a community wellbeing focus.
"The proposed potential location provides opportunity to be close to early years services and community health services," he said.
"The site makes sense from this perspective and has room to continue growing with possible new tenants."
The Kangaroo Flat Library is one of the Goldfields Libraries' busiest sites with about 1600 visitors each week. There are also 243 programs at the library, with 9000 people participating each year.
"Any relocation would aim to present a facility that reflects contemporary use of library spaces - more flexible program space, more space for people to use computers or devices, high standard free Wi-Fi, child friendly spaces and lots of comfy chairs," Mr Hands said.
"The library should be a welcoming place for social connection, relaxation and learning for our community and we look forward to any proposed new facility achieving these outcomes."
City of Greater Bendigo director Vicky Mason said moving the library to the Senior Citizens Centre on Lockwood Road would not affect any groups or organisations.
The centre is owned by the City.
"The Lockwood Road site is not highly utilised currently, just some social support groups, so the Library could co-exist with existing services at the site," Ms Mason said.
She said there had been an agreement to maintain the building as a library.
"A lease commenced in March 1979 between the former Shire of Marong and the then-owners of the shopping centre," Ms Mason said.
"The 1979 lease was for 35 years at a peppercorn agreement of $1 a year. The lease expired in March 2014. Since the lease expired, the library has been operating under the same terms and conditions as the original lease."
Charter Hall would not comment on the lease.
Kangaroo Flat resident Karen McMillan has urged the City of Greater Bendigo and the owners of Lansell Square to reconsider the relocation.
"I don't understand why they would want to move it to a place where it's not as accessible," she said. "What could they need to put there that has the same value to the community like a library? It just boggles my mind."
Ms McMillan's daughter-in-law and grandchildren use the Kangaroo Flat library regularly for the toddler reading time.
"My daughter-in-law says the Bendigo Library is bedlam because it's just getting busier," Ms McMillan said. "It's so hard to find a park within walking distance with two squirming little children. It really takes some of the pleasure out of it.
"Whereas in Kangaroo Flat, there's so much parking and people can go into the shops to do the shopping. And even for the elderly people who don't drive, there's always buses around."
The Lockwood Road location would not be a great fit, Ms McMillan said.
"I don't think it's suitable and I don't think it's appropriate," she said. "It's too far away from anything and a long way for some people to get to."
Kangaroo Flat resident Dennis Tickell, who uses the library on a regular basis, said the people of Kangaroo Flat should have a say on what happens to their library.
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