HEPBURN Springs' iconic Palais will go under the hammer later this month.

It is estimated the Palais will sell for more than $1.1 million on September 23.

Owner/operator Neil Bailey said he and his wife Karen, who have owned the venue for almost six years, were selling for family reasons.

"We've got three children and four grandchildren and we're missing out a bit," Mr Bailey said.

"We feel we've done our stint and that we've taken it as far as we can with live music and we need someone to come in and add their slant to it."

Over the six years the couple has owned the venue, Mr Bailey said they had concentrated on live music and had taken it to the next level.

"We've been lucky with the international musicians and acts that have come through, also some of the young Aussie bands such as Evermore, Little Birdy and Sarah Blasko," he said.

Mr Bailey said the Palais had been described by international artists as one of the most beautiful venues in the world.

Built in 1921, the main hall has been used as a famous dancefloor, as well as a billiard room, a ladies and gents private hairdressing parlour and, during the war, it was used as a temporary home for mentally handicapped children.

"The Palais attracts the big artists because it's so unique...they also choose to come here because of how beautiful the area is," Mr Bailey said.

"The artists really put pressure on their agents to make sure the Palais is included in their tours."

After the venue is sold, Mr Bailey said he planned to stay involved with live music, but with a "more mobile set up".

"I'm looking at doing some different stuff like open air live music, but also want to introduce a festival," he said.

"But my wife and I intend to stay in the area; we moved from Melbourne six years ago, we love it up here and the community has been very supportive."

Gerard Hurry, of commercial real estate agent TJ Board, said the Palais had attracted a significant amount of interest, with most from those who intend to keep it as an entertainment/hotel venue.

"It's in Hepburn Springs, so it's in close proximity to Daylesford and is considered as one of inland Victoria's best tourist precincts," Mr Hurry said.

"There's a lot of growth in the area and the Palais is a beautiful old building with lots of character, which lends itself to quite a few varied uses."