The car, which was initially going to remain in the lake due to hazards involved, was revealed late last year when the lake dried during an upgrade to the former dam wall.

However, after further consultation, Parks Victoria were able to access the car last Friday and remove the "rust bucket" with the help of a local towing company.

Hepburn Shire mayor Don Henderson said he was pleased the car had finally been removed.

"It's desirable to get any objects out of the lake. We would hope that people do enjoy the place, because it is a beautiful place for the public," Mr Henderson said.

He commended Parks Victoria for listening to the Creswick community.

"It wouldn't be left in Lake Wendouree and you wouldn't leave it any other parks so I'm really pleased that the people have been able to have some success," he said.

Parks Victoria spokesperson Jasmine Sussex said the car was removed just in time for Clean Up Australia Day on Sunday.

"Local staff are glad to see the back of the rust bucket which had been a clean up challenge for the park with falling and rising water levels over recent months,"  Ms Sussex said.

"Last week we were finally able to get safe access to the vehicle with the help of a local towing firm."

The car was believed to have been in the dam for up to 20 years and was discovered a decade ago by police divers investigating a separate crime at the time.