Hepburn Shire Council approved the development at 124 Main Road, Hepburn Springs in January but the tribunal hearing took four months to uphold council's approval.

Construction would start at site by the end of the year.

Owners Wayne Cross, Chris Malden, Brian Cross and Heather Cross were delighted with the outcome.

"We are ecstatic that VCAT has supported council's decision to grant a permit, which is the culmination of two years of planning and a lot of hard work," Mr Cross said.

The re-development would include 24 new hotel suites, replacing the 10 older garden rooms, six two-bedroom villas and an extension to the Mineral Spa. The extension would include an outdoor swimming

pool, associated carpark and landscaping.

The conference centre would be extended and the historic Villa Parma would be refurbished and incorporated into the portfolio of Peppers Springs Retreat Hotel and Mineral Spa.

Mr Cross said the development would bring a huge boost to the local economy, with the majority of the money to be put back into the community as the works are carried out over three years.

"Eventually the extensions will provide an opportunity for additional employment for locals with at least 20 new part time and permanent roles becoming available in housekeeping, food and beverage

and therapies once the development is completed.

"As with previous construction work at the property, all contractors used on the building works will be sourced locally from the greater Daylesford and Hepburn Springs region," Mr Cross said.

The current owners purchased the hotel seven years ago, completed the development of the Mineral Spa two years ago and acquired Villa Parma in the last year.

The upcoming re-opening of Villa Parma in July, which has been completed under the auspices of Heritage Victoria and has been refurbished in a contemporary style using traditional materials and

furniture that compliment the original features of the villa, will be the start of a new era in contemporary meets traditional Italian style. Owner Chris Malden said the development is incredibly exciting

for the village of Hepburn Springs and will help strengthen the region's profile.

"Currently there is a real shortage of international ready product that can accommodate overseas visitors seeking to experience the health and wellness attributes the region has to offer," Mr Malden

said.