The build is expected to take 12 month for Searle Bros, which won the contract following a competitive tender process run by the City of Greater Bendigo.

Bendigo council will deliver the $10.7 million project in partnership with the state government.

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Deputy premier and Bendigo East MP Jacinta Allan said the project would add to the Bendigo Tramways' legacy.

"We are one step closer to enabling more of our historic trams to be restored and preserved for the future, right in the heart of Bendigo," she said.

"The expansion of the Bendigo Tramways will create jobs and provide a boost to our local economy, while ensuring the rich history of our tram network can be maintained for years to come."

The tramways expansion will see storage at the site increase - allowing for retired W-Class trams from Newport to be kept at the site.

Workshops at the site will also be upgraded meaning crews can take on bigger projects and more restorations, while a new visitor experience will allow for an increase in tourism.

"The expansion of Bendigo Tramways will enable opportunities for locals and people right across regional Victoria to learn skills that help to preserve our transport history," Bendigo West MP Maree Edwards said.

The project was initially announced in May, 2019, with an aim to be done by March this year before the pandemic slowed the expansion's progress.

Bendigo Heritage Attractions chief executive James Reade said the appointment of Searle Bros was an exciting step forward.

"This is about creating the next chapter of the tramways and workshop facilities there," he said.

"For us, it has been a couple of years designing and getting to this stage with boots on the ground.

"We have some really unique skills in our workshops and are continuing to work on tram projects but also exploring what other opportunities are out there.

"We're also keen to see what role our trams can play in the Commonwealth Games in bringing people in and out of the city."

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