The renovated Rex Theatre in Vincent St is expected to house 14 tenants including a delicatessen, fruit shop, cafes, hairdresser, mixed businesses, professional offices and a butcher.

Other facilities include a state-of-the-art bowling alley consisting of two lanes and a candy bar, a food court, auditorium, toilets, a veranda and onsite car parking with 18 spaces.

Stage one, which will include the refurbishment of the existing building and development of the car park, is expected to be finished by December 1.

Stage two is expected to be finished by the middle of next year.

Part owner and real estate agent with Central Highlands Realty Keith Holley said he was negotiating with City Fringe Properties about tenancy.

"We've had preliminary discussions," he said.

"I think it will be wonderful for Daylesford. The bottom line will be the cost."

David Wynack from Stockdale and Leggo, which also occupies the building, said he had intended to stay at the front of the building.

Des Dunn of City Fringe Properties said developers would "spruce up" the theatre to its former glory.

"It will be in the best location and have the best shops," he said.

"The facade of the building will not be changed. It's magnificent upstairs and the architecture will be retained."

Tenancies are being sought by City Fringe Properties who will be in the area in the following weeks.

City Fringe Properties company director Martin Shembrey encouraged local businesses to apply for tenancy.

He said seven-day businesses would be appropriate for the development.

"It's right in the middle of the main street and will add a new look to the street," he said.

Mr Shembrey said businesses would have up to 14 days to apply for tenancy.

He said six businesses were already interested.

Mr Shembrey said he hadn't received any complaints from the community about the redevelopment.

"What's been planned has been approved," he said.

City Fringe Properties hoped to appoint a local real-estate agent to help applicants.