The funding, announced on Thursday, would come from the 2020-21 state budget.

Elmore Primary School principal Aaron Taylor said the school, which had 32 students, was thrilled with the announcement.

Read other news:

"It's not often that you receive this level of funding in one big hit," he said. "It's all happened fairly quickly, but it will be a real benefit for the entire Elmore community.

"Hopefully for the kids themselves, they will have modern and engaging learning facilities that are not too different from their urban counterparts. We just couldn't be happier."

Mr Taylor said the money would go towards upgrading the old school building, the grounds, and toilet facilities.

The principal said the funding would support the growing Elmore community.

"$1.2 million will have a big impact," Mr Taylor said. "The number of younger students coming through the kinder is increasing.

Read other news: Afghanistan war crimes inquiry finds evidence of murder, cover-up

"This means we're going to be able to meet the needs of the current students but also their younger siblings and students for years to come."

Education Minister James Merlino said the funding was an investment for the future.

"Every child, no matter where they go to school, deserves access to state-of-the-art facilities," he said.

"Schools are the heart of our communities, so it makes sense that we're investing in upgrades to support local jobs to drive our economic recovery."

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.