THE former Kyneton Primary School will become home to a new exhibition space, with $12 million allocated towards the site's revitalisation in the state budget.
Daylesford Macedon Tourism chief executive Steve Wroe deemed the investment a massive win for the region.
"One of our four brand pillars for the region is art and artisans," Mr Wroe said.
"To have a space that supports this pillar is huge from a tourism point of view and it supports what is a thriving creative sector and community.
"I am thrilled."
The works will include upgrades to existing facilities.
Kyneton Connections president Eric Dearricott said it was clear a lot of works were needed on both the heritage building and newer parts of the site.
"The $12m will really bring that space to something the community can be pleased with and proud of," Mr Dearricott said.
He said community consultations had shown support for the space to be used for art exhibitions, and to be accessible to the whole community.
"The original concern of the town was that it would either become dilapidated or it would be sold to become a commercial building and it was a much-loved community building in the town," Mr Dearricott said.
Though he expected the investment would be welcome, he was eagerly awaiting further details.
Announcing the funding, the state government said the site would become "a new home for art exhibitions and a space for the whole community to enjoy."
But it was not yet clear who would be managing the space.
More 2020-21 budget news:
An expression of interest process opened at the end of February, the results of which have yet to be made public.
The Macedon Ranges Shire Council considered making a bid to manage the site.
The Kyneton and District Town Square Co-Op submitted an expression of interest.
Co-op chair Rob Bakes was cautious in his welcome of the funding, without knowing the plan for the works or who would be managing the site.
"The most important thing is that the community is the site's manager," Mr Bakes said.
He was unclear if the new exhibition space would involve a new building, which would be contrary to the co-op's wishes for the town square, or would make use of the existing structures, as preferred.
Member for Macedon Mary-Anne Thomas said she hoped to have more to say soon about management of the site and when works would begin.
"I am very proud that this funding matches our community's ambition for this hugely significant site and I look forward to continuing the work with the community to see this site reach its full potential," Ms Thomas said.
Macedon Ranges Shire Council acting chief executive John Nevins welcomed the state government's investment.
"Developments such as this are especially significant at this time, when the community is recovering from the COVID-19 coronavirus pandemic," Mr Nevins said.
With exhibition space in short supply in the Kyneton area, so Mr Nevins said the development was sure to provide a boost for the arts community in particular.
"Exhibition spaces not only support local artists, they help to build on the town and the region's growing reputation as a vibrant centre for arts, crafts and lost trades," he said.
"The development, once complete, is sure to draw many visitors to the Kyneton area and this will help support local businesses through recovery and beyond."
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