The Federal Government has provided the University of Melbourne with a $1.71 million grant for upgrades to facilities at the Creswick campus.

Head of the School of Forest and Ecosystem Science professor Rod Keenan said the current gymnasium at Creswick would be renovated and turned into a multi-purpose recreational space.

A new gymnasium and sports hall will also be built.

"This will enable the development of high-quality student recreation facilities to match the world-class research laboratories and teaching spaces available at Creswick," Prof Keenan said.

"The gymnasium and sports hall will be available for use by the local community. It has been designed in collaboration with the Hepburn Shire and conforms to the shire's community facilities strategy," he said.

The university has engaged leisure management consulting company Garry Henshall and Associates to undertake an independent assessment of community need.

The study identified strong community support for the indoor recreation centre.

Prof Keenan said consultant Garry Henshall highlighted strong community need for fitness and gym facilities, as well as the need for an indoor sports training venue, a general purpose activity space and a social functions area.