Construction of the five-storey $60 million building - the largest construction project outside Melbourne - started last week.

The luxury Novotel Forest Resort, based on a contemporary Canadian-style lodge theme, will include 144 rooms, a 1000-person conference and wedding reception facilities, a chapel, health and wellness retreat, restaurants and

a premium retail precinct with boutique speciality stores.

It will be the first internationally-branded hotel to be launched in Victoria beyond metropolitan Melbourne.

Victorian property developer and Forest Resort managing director Jim Walsh said the decision to build a boomerang-shaped hotel was part of the resort's indigenous approach.

He said an agreement was signed this year between the Dja Dja Wurrung people and the resort that allowed the State of Victoria to issue Forest Resort a Crown lease, which took more than four years to complete.

Mr Walsh said the community's response to the development had been wonderful.

"It highlights Creswick as a tourist destination," he said.

"It's a great opportunity to showcase what we've got."

Novotel Forest Resort is part of the larger Forest Resort Development, a new $200 million integrated golf course and residential resort.

Mr Walsh said once completed, the resort would be positioned as one of Melbourne's leading regional hotel properties, with a special focus on conference and leisure getaways.

"It will be the most significant relaxation and business travel destination this side of the South Australian border," he said.

Mr Walsh said the reason he wanted to develop the resort was because the area had so much to offer provincial Victoria.

The residential component of the Forest Resort development includes a gated residential community of 200 premium architecturally-designed homes

Eighteen Grand Mercure apartments were opened for business 18 months ago, and are achieving occupancy rates of more than 80 per cent.