The speed limit will drop from 100km/h to 80 km/h within the Sutton Grange township with new restrictions and signage to be installed in coming weeks.

The change comes after a petition containing 128 signatures was submitted to Mount Alexander Shire Council.

Council then submitted a request to Regional Roads Victoria to reduce the speed limit, which was supported and approved.

Calder ward councillor Tony Cordy said he was pleased with the outcome after council acknowledged safety concerns raised by residents and supported speed limit reduction.

Residents argued a speed limit reduction would improve road user and resident safety, without significantly impacting traffic flow or driver journey times.

"This is a really positive change for the community, given it's something they've been concerned about for some time," Cr Cordy said.

"The new reduced speed limit will help residents in the township feel safer, and will also increase the safety of pedestrians and drivers."

Council's director of infrastructure and development Jess Howard agreed the speed limit reduction was a win for the community.

"Residents raised their concerns with Council regarding the road, and we are pleased to have worked in partnership with them and Regional Roads Victoria to achieve the outcome they were hoping for," Ms Howard said.

"This initiative really highlights Council's commitment to improving access to a range of safe travel choices for the community."

Council and Regional Roads Victoria share responsibility for the management of roads within Mount Alexander Shire. Bendigo-Sutton Grange Road is managed by Council.