THE Southern Purple Spotted Gudgeon fish has been presumed extinct in Victoria for about 20 years.
But two fish sighted at a lake in Kerang have buoyed hopes a population survives.
Crews working to restore Third Reedy Lake to its original state as a deep, freshwater marsh discovered the fish late last month.
They would be presumed to be the state's only remaining population of Southern Purple Spotted Gudgeon fish (Mogurnda adspersa), if confirmed.
The fish were photographed and a small sample was taken from a fin for DNA testing.
Results are expected within weeks.
The government said it would work with water corporations, catchment management authorities, the Victorian Fisheries Authority, environmental consultants, experts and the community to protect and recover the species if the results were positive.
Water minister Lisa Neville said it would be a major environmental discovery.
The fish have been presumed extinct in Victoria since 1997-98, when a population at Cardross Lakes died.
The government said the two fish discovered at Third Reedy Lake last month were safely returned after being photographed and sampled.
Works are believed to have stopped as soon as the fish were discovered.
The lake draw down process has been halted pending the results of the DNA testing.
The project at Third Reedy Lake is part of a $2b nationwide initiative intended to modernise irrigation.
Relocating native fish from the lake to more suitable habitats in nearby waterways is part of the project, the state government said.
Have you signed up to the Bendigo Advertiser's daily newsletter and breaking news emails? You can register below and make sure you are up to date with everything that's happening in central Victoria.