The McCrae Street building - where generations of children learnt gymnastics - would become a Mecca for grownups with a taste for craft beer and regional produce.

A bar could be built where the gym's popular foam pit once sat.

Another one would be built in the basement.

Company Bendigo Brewing has lodged plans for the $600,000 project with the City of Greater Bendigo.

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It wants to start building later this year and open in 2021, provided it get planning approval from the council.

It would be a huge transformation from the days before Palmer's Gym moved to Mundy Street, Bendigo Brewing chairperson Jo Doye said.

"We've had a few people request we keep lot's of the paintings of gymnasts on the walls," she said.

"We can't promise that, but we will pay some sort of homage to the days gymnastics took place there."

The brewery could house as many as many as 300 people, depending on the floor plan's final layout. It could also produce 150,000 litres of booze annually.

Most of the beer would be sold onsite, though a very limited amount could be sent to outlets in Bendigo and Melbourne Ms Doye said.

"The idea is that if you want to taste our beers you actually need to come in and try them," she said.

"We want to take advantage of that boom in Bendigo's tourism to be seen as a beer destination."

Ms Doye said Bendigo Brewing was in negotiations with a "renowned" brewer considering relocating from interstate.

"I would say that we will know if that's locked in in the next week or so," she said.

Ms Doye hopes the brewery could also help train the next generation of beer makers.

"We are designing the brew house so that when its not open for business students from somewhere like TAFE could come across," she said.

Bendigo Brewing would be the latest microbrewery to tap into Australia's thirst for new craft beer brands.

Many businesses are tapping into a market expected to grow 5.3 per cent by 2025, consultancy firm Goldstein Research has predicted.

Brookes Beer and True Brew are among those that have made their mark on the region's beer scene.

The McCrae Street brewery would be a stone's throw away from the Golden Dragon Museum, Rosalind Park and Bendigo Tramway's tourist line.

The building was pumping out beer as early as the 1860s, when the Hunter Brothers established their Kent Brewery.

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