The state government on Thursday announced it would fund the new kinder, which would be located at the Kyneton Primary School.

The primary school's principal Alistair Rayner said there would be 66 additional kindergarten places as a result of the development.

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"It's an exciting project for the whole town, especially the school community," Mr Rayner said.

"This project has been part of our master plan for six or seven years as part of the broader Kyneton education precinct.

"There will be some real positives with the sharing of knowledge between early learning educators and our teaching staff.

"There is also the opportunity to continue to enhance the transition process between kinder and school, from a really good transition program to a great one.

"That leap from kindergarten to primary school won't be so big anymore."

The state government project would be delivered in partnership with the Macedon Ranges Shire Council.

Member for Macedon Mary-Anne Thomas said the site should be ready to open for enrolments in the first term of 2022.

"We know that kinders co-located with primary schools deliver the best outcomes for children, and this new kinder will set Kyneton kids up for life," she said.

Mr Rayner said the new site would support a growing Kyneton community.

"This will continue to guarantee prep enrolment in a strong way," he said. "We have a Catholic school right next door and that will be good for them as well.

"It's a great announcement for the town and our young people."

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