A $400,000 boost from the State Government, announced last week, will allow building to begin, nearly 20 years after the first plans were made for a multi-purpose facility on the site.

Doug Lindsay Recreational Reserve Fundraising and Reference Group committee member David McPhee hopes the facility will bring more families back to Creswick.

"There's actually been families up and moving to Ballarat because they're sick of taking their children into Ballarat all the time. We've lost a lot of families," he said.

The Creswick Community Hub would feature more sporting facilities, including football fields, as well as a hall, a kitchen and bar area, change rooms and two smaller multi-use meeting rooms.

Costing $3.1 million, it would provide the space for music events and celebrations, community meetings, and a central venue for community gatherings during an emergency.

Mr McPhee said existing facilities were run-down and, in some cases, dangerous. The football fields at Hammond Reserve were a prime example.

"If it kicks out of bound they're dodging traffic," he said.

"Parents worry about kids running into the creek out the back of Hammond Park."

Mr McPhee said the community had fought so hard for the facility for the sake of "the young ones".

Mayor Bill McClenaghan said the community of Creswick had been "short-changed for years," but the state's funding announcement would finally give the project the green light.

He said the cost of the facility had been the major hurdle, with all levels of government having to step in to fund it.

In addition to the State Government's $400,000 Victorian Community Support Grant, the Federal Government is contributing $2.3 million. Hepburn Shire Council is contributing $300,000.

"It's time Creswick got a decent go," Cr McClenaghan said.

"Sporting facilities are certainly one of the most positive community building activities there are."

Member for Ballarat East Geoff Howard said the hub would become a valued place for Creswick residents.

"The Doug Lindsay Reserve is already a focal point for community activity and this new development will help to get more people involved in community events," he said.

Drawings of the facility are "substantially underway" and it is expected the first sod will be turned early next year.