The community-owned wind farm, which has passed all government approval processes, will be located at Leonards Hill, with project construction expected to begin in coming months.

The turbines will be up and running by the end of the year.

It will become Australia's first community-owned wind farm, modelled on similar projects across Europe and the United States.

The power generated by the turbines is expected to be sold to an electricity retailer who would brand it Hepburn Wind power.

Hepburn Wind chairman Simon Holmes a Court said the payment of a deposit to REpower Systems AG, one of the world's leading wind farm manufactures, was a major milestone, not only for the Hepburn Wind project, but for Australia.

"While many communities are still considering their response to climate change, the residents of Hepburn Shire can be extremely proud of the local efforts to generate clean power for Daylesford and many of the surrounding towns," he said.

"Hepburn Wind and REpower are now working to finalise the remaining contractual details related to delivery and commissioning. We expect to announce the project construction timeline by the end of this quarter."

Hepburn Wind director Scott Kinnear said while Australia was aiming for 20 per cent renewable energy, Daylesford would be 100 per cent in 2010.

"This outstanding achievement will be due to vital support of Hepburn Wind's 1070 members, the wider Hepburn Shire community, the State Government through Sustainability Victoria and The Bendigo and Adelaide Bank," he said.

By the end of 2009, the locally-controlled cooperative had secured more than $11.3 million in funding.

Executive officer Jack Guilding said membership applications continued to arrive, mainly from the local region.