The state government has committed $500,000 to rebuild the Bullarto train station, a step towards bringing a new tourist attraction to the Daylesford region.
Hepburn Shire Council will lead the project, which involves building a replica of the original 1930s station, with new gardens and amenities.
A state government media release notes "detailed planning is under way between the Hepburn Shire and the Daylesford Spa Country Rail".
"Historic rail motors were used at Bullarto Station between the late 1920s and early 1990s," it states. "The redevelopment plan envisions rail motors bringing visitors to town from Daylesford through the Wombat State Forest."
Hepburn mayor Lesley Hewitt said in a statement it will "provide visitors an opportunity to experience a taste of rural life in the 1930s and learn about the critical role of railways in rural communities", as well as an opportunity to visit wineries, accommodation businesses, and local producers in Bullarto.
Spa Country Railway will provide $50,000 to complete the project - vice president Steve Flume said 24,000 passengers went on the train in 2019.
"We've nearly surpassed our 2019 passenger numbers," he said in a statement.
"We're already on our way to reaching that and it's only May."
Railway director Barry Fell said the railway station at Bullarto was once the heart of the town.
"People left for war here, it was the post office - the post and papers came here every day, that's how everything was delivered," he said.
"Women were often the caretakers of stations. With the new building here we will be able to show how they worked and what it was like for them without running water and only using kerosene lights.
"That's the story we can now tell - the story of the people who ran the railway when it was the communication and travel lifeline for rural Victoria."
Council will also provide $125,000 for the project, joining the investment from the state government's Regional Infrastructure Fund.
The project is ready for the final design phase, including planning and permits. On-site construction is expected to begin early next year.
The Bullarto Station operated between 1880 and 1978.
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